The Rest Of Us on Patreon:
https://www.patreon.com/TheRestOfUs
The Rest Of Us on Twitter:
http://twitter.com/TROUchannel
The Rest Of Us T-Shirts and More:
http://teespring.com/TheRestOfUsClothing
Part 2:
https://www.youtube.com/watch?v=fcjmVj5fM5k
Credits:
Music by The FatRat.
https://www.youtube.com/channel/UCa_UMppcMsHIzb5LDx1u9zQ
If you're a YouTuber, definitely check The FatRat. The channel offers a wide variety of free-to-use music for your videos.

published:02 Jun 2016

views:800990

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you about the company and its possible valuation multiples before and after going public.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
4:17 The Rationale and Assumptions Behind an IPO
7:47 Pricing vs. Trading Equity Value in an IPO
12:38 Primary vs. Secondary Shares and the Greenshoe or Overallotment Provision
16:10 Deal Size & Net Proceeds to Issuer
19:31 Implied ValuationMultiples
21:08 Alternate IPO ModelDriven by Offering Price per Share and Shares Sold/Issued
24:05 Recap and Summary
Lesson Outline:
We get a lot of questions about "IPO valuation" or "IPO modeling," but the truth is that it’s really simple because you don't, in fact, "value" a company in an IPO.
Instead, you simply value a company and then decide how its valuation might be different in an IPO (e.g., no private company discount).
Step 1: Assumptions & Setup
You almost always start an IPO model with an idea of how much in funding the company wants to raise, and the multiples it may be valued at (based on public comps).
The multiples used vary by industry, but 1-year forward P / E multiples are very common (e.g., go to the next full fiscal year and assume a multiple for that projected full-year figure).
Here, we’d pick forward multiples from similar, profitable social networking / mobile messaging companies (not covered in this tutorial in the interest of time).
Amount of Capital to Raise: Very discretionary and it comes down to the company's plans, how many existing shareholders want to sell, whether it's PE or VC-backed, etc.
This is often set to 20-40% of a company's value; common to sell ~1/4 or ~1/3 of the company in a public offering, though that also varies.
Step 2: Trading vs. Pricing and the Pricing Discount
You apply the assumed multiple to the company's relevant metric, so ForwardNet Income in this case, which gets you the "Post-Money Equity Value @ Trading."
This is what the company's market cap should be after it has raised the capital and is trading on the stock market.
So we can then calculate the Post-Money Equity Value at Trading (the market rate) vs. Pricing (the discounted rate that institutional investors get).
And then calculate the Implied Offering Price per Share based on this - take this value, subtract the funds raised, and divide by the company's current share count.
Step 3: Determining the Primary vs. Secondary Shares and the "Greenshoe" (Overallotment) Provision
"Primary Shares" are newly created shares that represent actual capital being raised in the deal - this capital then goes to the company in the form of cash.
"Secondary Shares" represent existing investors selling their stakes to new investors (usually large institutions like Fidelity). No capital is raised here.
Formulas: Always determine the Primary Shares first, based on the Post-Money Equity Value @ Pricing and/or the amount of capital raised… and then figure out the Secondary Shares in relation to that.
Have to also figure out split between "Base Offering" and "Greenshoe" - "Greenshoe" is an option to issue even more shares if demand is strong enough. Used for cases where the company wants to keep the same offering price, but simply raise more capital if more investors are interested.
Very commonly set to ~15% in offerings in developed markets.
Step 4: Net Proceeds to Issuer
Look at Total Offering Size first (Primary + Secondary + Overallotment) and then subtract out fees.
Underwriting Discount: Banks used to, and sometimes still do, buy a portion of the company's stock as "insurance" in case the company can't sell it to anyone else… so this is supposed to compensate them for the risk of holding the stock temporarily, in case it can't find any buyers.
Bigger deal = lower fee % in most cases.
% Company Sold: Based on Primary Proceeds and Post-Money Equity Value @ Pricing - how much the company sold of itself just before it started trading publicly.
Step 5: Valuation Multiples
We move from Equity Value to Enterprise Value as we normally do… but we must factor in the cash raised in the IPO now!
Equity Value implicitly reflects this cash, so it must be subtracted when calculating the new Enterprise Value.
Would have to compare these multiples to those of the public comps to decide whether or not they look reasonable.
RESOURCES:
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.xlsx
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.pdf

published:17 Mar 2015

views:36764

Raising money from an angel investor. Pre-money and post-money valuation. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/getting-a-seed-round-from-a-vc?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/ebitda?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks through starting, financing and taking public a company (and even talks about what happens if it has trouble paying its debts).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

published:29 Jan 2009

views:528980

The initial public offering of our online sock company. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/more-on-ipos?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/going-back-to-the-till-series-b?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks through starting, financing and taking public a company (and even talks about what happens if it has trouble paying its debts).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

published:31 Jan 2009

views:166982

Mechanics of a share-based acquisition. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/mergers-acquisitions/v/price-behavior-after-announced-acquisition?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/dilution-tutorial/v/stock-dilution?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: Companies often buy or merge with other companies using shares (which is sometimes less intuitive than when they use cash). This tutorial walks through the mechanics of how this happens and details what is likely to happen in the public markets because of the transaction (including opportunities for arbitrage).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

published:12 May 2011

views:59182

Do your research before investing in IPO stocks to avoid getting in at the wrong time.
IPO (Initial Public Offering)
-The first time the stock is released to the public and is available for purchase
The Problem With IPOs:
-The stock market is based on future expected growth
-IPOs need time to set up
-Preferred shareholders typically sell their shares as soon as the IPO comes out, which causes the stock to go down
-Sometimes preferred shareholders are required to hold their shares for 60-90 days, the stock can decrease at this time instead of dropping initially.
-As time go on, more shareholders can sell their stock. You need to read the find print to find out when this happens.
-Let the charts set up, give them time and do not hurry
-Don't jump into things too quickly, IPOs should be avoided initially
-Understand why you are buying the stock. Don't just purchase it because it's a company you use (e.g. Zynga or Groupon)
-A better time to get in is after the stock has decreased over a period of time and begins to go back up. You don't need to get in right away.
Example:
-Facebook (FB)
-Everyone expected FB to go way up, but it went very low because preferred shareholders sold their shares right away
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us!
STOCK TRADING COURSES:
-- http://tradersfly.com/courses/
STOCK TRADING BOOKS:
-- http://tradersfly.com/books/
WEBSITES:
-- http://rise2learn.com
-- http://criticalcharts.com
-- http://investinghelpdesk.com
-- http://tradersfly.com
-- http://backstageincome.com
-- http://sashaevdakov.com
SOCIAL MEDIA:
-- http://twitter.com/criticalcharts/
-- http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
-- TradersFly: http://bit.ly/tradersfly
-- BackstageIncome: http://bit.ly/backstageincome

published:05 Oct 2012

views:45334

Federal regulators are cracking down on an obscure but booming market for trading shares in companies before they go public, TK on Markets Hub.

published:15 Mar 2012

views:206

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuation for an IPO.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2Modtest.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession20.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20test.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20soln.pdf

published:21 Apr 2015

views:3053

Why are there stocks at all?
Everyday in the news we hear about the stock exchange, stocks and money moving around the globe. Still, a lot of people don't have an idea why we have stock markets at all, because the topic is usually very dry. We made a short video about the basics of the stock exchanges. With robots. Robots are kewl!
Short videos, explaining things. For example Evolution, the Universe, the Stock Market or controversial topics like Fracking. Because we love science.
We would love to interact more with you, our viewers to figure out what topics you want to see. If you have a suggestion for future videos or feedback, drop us a line! :)
We're a bunch of Information designers from munich, visit us on facebook or behance to say hi!
https://www.facebook.com/Kurzgesagt
https://www.behance.net/kurzgesagt
How the Stock Exchange works
Help us caption & translate this video!
http://www.youtube.com/timedtext_cs_panel?c=UCsXVk37bltHxD1rDPwtNM8Q&tab=2

published:28 Nov 2013

views:4522581

You’ll learn about StartupValuation in this lesson, and see how a traditional methodology such as the Discounted Cash Flow (DCF) analysis applies to early-stage tech startups with no revenue.
http://breakingintowallstreet.com/
"Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
2:59 A DCF Analysis for Piped Piper
9:01 What’s Required for a Startup DCF/Valuation to Work
12:35 Recap and Summary
How Are Startups WorthBillions of Dollars?
“I don’t understand how tech startups can be worth billions of dollars – many of them aren’t even making money yet!”
“How can an unprofitable company that isn’t even generating revenue possibly be worth so much? Doesn’t this violate all the principles of valuation?”
We get questions like the ones above all the time. The short answer is NO, startup valuation doesn’t violate all the principles.
You can still use standard methodologies such as the DCF, but you have to use radically different assumptions that make the analysis less grounded in reality.
For the numbers to work, the startup has to start making A LOT of money very quickly in the NEAR FUTURE.
If it takes 10-15 years to generate revenue, it will be almost impossible for the numbers to work; but if it happens in the next 2-3 years, it might be plausible.
As an example, we look at Pied Piper in this lesson, the fictional company from the HBO show “Silicon Valley.”
They make money with a file compression and storage app, and they’re aiming to get hundreds of millions of users and then get a tiny percentage of them using their paid services.
So if they currently generate no revenue and have just received $100 million in funding at a $1 billion valuation, is that crazy?
A DCF for Pied Piper
We assume massive app download growth in the early years, with the company reaching ~500 million annual downloads and ~150 million paid users by the end of Year 10. Revenue goes from 0 to nearly $2 billion over that time frame.
The company goes from negative Operating Income to nearly $500 million (25% margin) and almost $300 million in FreeCash Flow.
We use a 100xEBITDA multiple to calculate the Terminal Value (arguably fair for a $2 billion company growing at nearly 40% per year).
These assumptions are highly speculative, and so we also have to use a much higher Discount Rate: 50%, compared with the standard 8-12% figures you see for mature companies.
As a result of all this, far more value comes from the Present Value of the Terminal Value: 99% here, vs. 50-70% for normal companies (and ideally less than that!).
The whole valuation is dependent on a huge number of assumptions that are impossible to know in advance: Will billions of people download the app? Will ~5% of users convert to paying customers? Will the company be able to monetize in only 2-3 years’ time?
These assumptions might turn out to be true, but there’s a very high chance they might not be – which explains the 50% Discount Rate.
Startup Valuation Myths
So the DCF does “work” for startups; it’s just not that useful because of all the required assumptions and the inability to guesstimate the numbers for a pre-revenue company.
For a valuation to make sense, the company has to start generating money *very quickly* – if it takes ten years for that to happen, the numbers will be even harder to justify.
And since the majority of the implied value comes from the Terminal Value, the Terminal Multiple and Terminal Growth Rate are incredibly important. They matter more than long-term profit margins because almost no value comes from the Present Value of Free Cash Flows.
RESOURCES:
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-17-How-Are-Startups-Worth-Billions-Slides.pdf
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-17-How-Are-Startups-Worth-Billions.xlsx

published:14 Jun 2016

views:23786

In this WACC and Cost of Equity tutorial, you'll learn how changes to assumptions in a DCF impact variables like the Cost of Equity, Cost of Debt.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
You'll also learn about WACC (Weighted Average Cost of Capital) - and why it is not always so straightforward to answer these questions in interviews.
Table of Contents:
2:22 Why Everything is Interrelated
4:22 Summary of Factors That Impact a DCF
6:37 Changes to Debt Percentages in the Capital Structure
11:38 The Risk-Free Rate, Equity Risk Premium, and Beta
12:49 The Tax Rate
14:55 Recap and Summary
Why Do WACC, the Cost of Equity, and the Cost of Debt Matter?
This is a VERY common interview question:
"If a company goes from 10% debt to 30% debt, does its WACC increase or decrease?"
"What if the Risk-Free Rate changes? How is everything else impacted?"
"What if the company is bigger / smaller?"
Plus, you need to use these concepts on the job all the time when valuing companies… these "costs" represent your
opportunity cost from investing in a specific company, and you use them to evaluate that company's cash flows and determine
how much the company is worth to you.
EX: If you can get a 10% yield by investing in other, similar companies in this market, you'd evaluate this company's cash flows against that 10% "discount rate"…
…and if this company's debt, tax rate, or overall size changes, you better know how the discount rate also changes! It could easily change the company's value to you, the investor.
The Most Important Concept…
Everything is interrelated - in other words, more debt will impact BOTH the equity AND the debt investors!
Why?
Because additional leverage makes the company riskier for everyone involved. The chance of bankruptcy is higher, so the "cost" even to the equity investors increases.
AND: Other variables like the Risk-Free Rate will end up impacting everything, including Cost of Equity and Cost of Debt, because both of them are tied to overall interest rates on "safe" government bonds.
Tricky: Some changes only make an impact when a company actually has debt (changes to the tax rate), and you can't always predict how the value derived from a DCF will change in response to this.
Changes to the DCF Analysis and the Impact on Cost of Equity, Cost of Debt, WACC, and Implied Value:
SmallerCompany:
Cost of Debt, Equity, and WACC are all higher.
Bigger Company:
Cost of Debt, Equity, and WACC are all lower.
* Assuming the same capital structure percentages - if the capital structure is NOT the same, this could go either way.
EmergingMarket:
Cost of Debt, Equity, and WACC are all higher.
No Debt to Some Debt:
Cost of Equity and Cost of Debt are higher. WACC is lower at first, but eventually higher.
Some Debt to No Debt:
Cost of Equity and Cost of Debt are lower. It's impossible to say how WACC changes because it depends on where you are in the "U-shaped curve" - if you're above the debt % that minimizes WACC, WACC will decrease.
Otherwise, if you're at that minimum or below it, WACC will increase.
Higher Risk-Free Rate:
Cost of Equity, Debt, and WACC are all higher; they're all lower with a lower Risk-Free Rate.
Higher Equity Risk Premium and Higher Beta:
Cost of Equity is higher, and so is WACC; Cost of Debt doesn't change in a predictable way in response to these.
When these are lower, Cost of Equity and WACC are both lower.
Higher Tax Rate:
Cost of Equity, Debt, and WACC are all lower; they're higher when the tax rate is lower.
** Assumes the company has debt - if it does not, taxes don't make an impact because there is no tax benefit to interest paid on debt.

published:23 Sep 2014

views:83061

Pre and post money valuation explained for entrepreneurs,Harvard Business School. Pre-money refers to a company's value before it receives outside financing or the latest round of financing, while post-money refers to its value after it gets outside funds or its latest capital injection.To Know more about pre & post money valuation watch this video.
For more free finance lessons and 1:1 live mentorship with industry experts, visit us: https://mentor.bluebookacademy.com/live-1-1-mentoring/

Khan Academy

Khan Academy is a non-profit educational organization created in 2006 by educator Salman Khan with the aim of providing a free, world-class education for anyone, anywhere. The organization produces short lectures in the form of YouTube videos. In addition to micro lectures, the organization's website features practice exercises and tools for educators. All resources are available for free to anyone around the world. The main language of the website is English, but the content is also available in other languages.

In late 2004, Khan began tutoring his cousin Nadia who needed help with math using Yahoo!'s Doodle notepad.When other relatives and friends sought similar help, he decided that it would be more practical to distribute the tutorials on YouTube. The videos' popularity and the testimonials of appreciative students prompted Khan to quit his job in finance as a hedge fund analyst at Connective Capital Management in 2009, and focus on the tutorials (then released under the moniker "Khan Academy") full-time.

Capital market

Capital markets are financial markets for the buying and selling of long-term debt or equity-backed securities. These markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments. Capital markets are defined as markets in which money is provided for periods longer than a year.
Financial regulators, such as the UK's Bank of England (BoE) or the U.S. Securities and Exchange Commission (SEC), oversee the capital markets in their jurisdictions to protect investors against fraud, among other duties.

Modern capital markets are almost invariably hosted on computer-based electronic trading systems; most can be accessed only by entities within the financial sector or the treasury departments of governments and corporations, but some can be accessed directly by the public. There are many thousands of such systems, most serving only small parts of the overall capital markets. Entities hosting the systems include stock exchanges, investment banks, and government departments. Physically the systems are hosted all over the world, though they tend to be concentrated in financial centres like London, New York, and Hong Kong.

Startup Funding Explained: Everything You Need to Know

The Rest Of Us on Patreon:
https://www.patreon.com/TheRestOfUs
The Rest Of Us on Twitter:
http://twitter.com/TROUchannel
The Rest Of Us T-Shirts and More:
http://teespring.com/TheRestOfUsClothing
Part 2:
https://www.youtube.com/watch?v=fcjmVj5fM5k
Credits:
Music by The FatRat.
https://www.youtube.com/channel/UCa_UMppcMsHIzb5LDx1u9zQ
If you're a YouTuber, definitely check The FatRat. The channel offers a wide variety of free-to-use music for your videos.

25:45

IPO Valuation Model

IPO Valuation Model

IPO Valuation Model

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you about the company and its possible valuation multiples before and after going public.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
4:17 The Rationale and Assumptions Behind an IPO
7:47 Pricing vs. Trading Equity Value in an IPO
12:38 Primary vs. Secondary Shares and the Greenshoe or Overallotment Provision
16:10 Deal Size & Net Proceeds to Issuer
19:31 Implied ValuationMultiples
21:08 Alternate IPO ModelDriven by Offering Price per Share and Shares Sold/Issued
24:05 Recap and Summary
Lesson Outline:
We get a lot of questions about "IPO valuation" or "IPO modeling," but the truth is that it’s really simple because you don't, in fact, "value" a company in an IPO.
Instead, you simply value a company and then decide how its valuation might be different in an IPO (e.g., no private company discount).
Step 1: Assumptions & Setup
You almost always start an IPO model with an idea of how much in funding the company wants to raise, and the multiples it may be valued at (based on public comps).
The multiples used vary by industry, but 1-year forward P / E multiples are very common (e.g., go to the next full fiscal year and assume a multiple for that projected full-year figure).
Here, we’d pick forward multiples from similar, profitable social networking / mobile messaging companies (not covered in this tutorial in the interest of time).
Amount of Capital to Raise: Very discretionary and it comes down to the company's plans, how many existing shareholders want to sell, whether it's PE or VC-backed, etc.
This is often set to 20-40% of a company's value; common to sell ~1/4 or ~1/3 of the company in a public offering, though that also varies.
Step 2: Trading vs. Pricing and the Pricing Discount
You apply the assumed multiple to the company's relevant metric, so ForwardNet Income in this case, which gets you the "Post-Money Equity Value @ Trading."
This is what the company's market cap should be after it has raised the capital and is trading on the stock market.
So we can then calculate the Post-Money Equity Value at Trading (the market rate) vs. Pricing (the discounted rate that institutional investors get).
And then calculate the Implied Offering Price per Share based on this - take this value, subtract the funds raised, and divide by the company's current share count.
Step 3: Determining the Primary vs. Secondary Shares and the "Greenshoe" (Overallotment) Provision
"Primary Shares" are newly created shares that represent actual capital being raised in the deal - this capital then goes to the company in the form of cash.
"Secondary Shares" represent existing investors selling their stakes to new investors (usually large institutions like Fidelity). No capital is raised here.
Formulas: Always determine the Primary Shares first, based on the Post-Money Equity Value @ Pricing and/or the amount of capital raised… and then figure out the Secondary Shares in relation to that.
Have to also figure out split between "Base Offering" and "Greenshoe" - "Greenshoe" is an option to issue even more shares if demand is strong enough. Used for cases where the company wants to keep the same offering price, but simply raise more capital if more investors are interested.
Very commonly set to ~15% in offerings in developed markets.
Step 4: Net Proceeds to Issuer
Look at Total Offering Size first (Primary + Secondary + Overallotment) and then subtract out fees.
Underwriting Discount: Banks used to, and sometimes still do, buy a portion of the company's stock as "insurance" in case the company can't sell it to anyone else… so this is supposed to compensate them for the risk of holding the stock temporarily, in case it can't find any buyers.
Bigger deal = lower fee % in most cases.
% Company Sold: Based on Primary Proceeds and Post-Money Equity Value @ Pricing - how much the company sold of itself just before it started trading publicly.
Step 5: Valuation Multiples
We move from Equity Value to Enterprise Value as we normally do… but we must factor in the cash raised in the IPO now!
Equity Value implicitly reflects this cash, so it must be subtracted when calculating the new Enterprise Value.
Would have to compare these multiples to those of the public comps to decide whether or not they look reasonable.
RESOURCES:
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.xlsx
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.pdf

Raising money from an angel investor. Pre-money and post-money valuation. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/getting-a-seed-round-from-a-vc?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/ebitda?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks through starting, financing and taking public a company (and even talks about what happens if it has trouble paying its debts).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

14:30

An IPO | Stocks and bonds | Finance & Capital Markets | Khan Academy

An IPO | Stocks and bonds | Finance & Capital Markets | Khan Academy

An IPO | Stocks and bonds | Finance & Capital Markets | Khan Academy

The initial public offering of our online sock company. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/more-on-ipos?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/going-back-to-the-till-series-b?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks through starting, financing and taking public a company (and even talks about what happens if it has trouble paying its debts).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Mechanics of a share-based acquisition. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/mergers-acquisitions/v/price-behavior-after-announced-acquisition?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/dilution-tutorial/v/stock-dilution?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: Companies often buy or merge with other companies using shares (which is sometimes less intuitive than when they use cash). This tutorial walks through the mechanics of how this happens and details what is likely to happen in the public markets because of the transaction (including opportunities for arbitrage).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

4:59

IPO Basics: What is an IPO (Initial Public Offering) Definition

IPO Basics: What is an IPO (Initial Public Offering) Definition

IPO Basics: What is an IPO (Initial Public Offering) Definition

Do your research before investing in IPO stocks to avoid getting in at the wrong time.
IPO (Initial Public Offering)
-The first time the stock is released to the public and is available for purchase
The Problem With IPOs:
-The stock market is based on future expected growth
-IPOs need time to set up
-Preferred shareholders typically sell their shares as soon as the IPO comes out, which causes the stock to go down
-Sometimes preferred shareholders are required to hold their shares for 60-90 days, the stock can decrease at this time instead of dropping initially.
-As time go on, more shareholders can sell their stock. You need to read the find print to find out when this happens.
-Let the charts set up, give them time and do not hurry
-Don't jump into things too quickly, IPOs should be avoided initially
-Understand why you are buying the stock. Don't just purchase it because it's a company you use (e.g. Zynga or Groupon)
-A better time to get in is after the stock has decreased over a period of time and begins to go back up. You don't need to get in right away.
Example:
-Facebook (FB)
-Everyone expected FB to go way up, but it went very low because preferred shareholders sold their shares right away
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us!
STOCK TRADING COURSES:
-- http://tradersfly.com/courses/
STOCK TRADING BOOKS:
-- http://tradersfly.com/books/
WEBSITES:
-- http://rise2learn.com
-- http://criticalcharts.com
-- http://investinghelpdesk.com
-- http://tradersfly.com
-- http://backstageincome.com
-- http://sashaevdakov.com
SOCIAL MEDIA:
-- http://twitter.com/criticalcharts/
-- http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
-- TradersFly: http://bit.ly/tradersfly
-- BackstageIncome: http://bit.ly/backstageincome

4:06

SEC Cracks Down on Pre-IPO Trading

SEC Cracks Down on Pre-IPO Trading

SEC Cracks Down on Pre-IPO Trading

Federal regulators are cracking down on an obscure but booming market for trading shares in companies before they go public, TK on Markets Hub.

1:30:07

Session 20: Valuing Private Business (for sale and IPO)

Session 20: Valuing Private Business (for sale and IPO)

Session 20: Valuing Private Business (for sale and IPO)

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuation for an IPO.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2Modtest.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession20.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20test.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20soln.pdf

3:34

How The Stock Exchange Works (For Dummies)

How The Stock Exchange Works (For Dummies)

How The Stock Exchange Works (For Dummies)

Why are there stocks at all?
Everyday in the news we hear about the stock exchange, stocks and money moving around the globe. Still, a lot of people don't have an idea why we have stock markets at all, because the topic is usually very dry. We made a short video about the basics of the stock exchanges. With robots. Robots are kewl!
Short videos, explaining things. For example Evolution, the Universe, the Stock Market or controversial topics like Fracking. Because we love science.
We would love to interact more with you, our viewers to figure out what topics you want to see. If you have a suggestion for future videos or feedback, drop us a line! :)
We're a bunch of Information designers from munich, visit us on facebook or behance to say hi!
https://www.facebook.com/Kurzgesagt
https://www.behance.net/kurzgesagt
How the Stock Exchange works
Help us caption & translate this video!
http://www.youtube.com/timedtext_cs_panel?c=UCsXVk37bltHxD1rDPwtNM8Q&tab=2

14:11

Startup Valuation - How Are Startups Worth Billions?

Startup Valuation - How Are Startups Worth Billions?

Startup Valuation - How Are Startups Worth Billions?

You’ll learn about StartupValuation in this lesson, and see how a traditional methodology such as the Discounted Cash Flow (DCF) analysis applies to early-stage tech startups with no revenue.
http://breakingintowallstreet.com/
"Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
2:59 A DCF Analysis for Piped Piper
9:01 What’s Required for a Startup DCF/Valuation to Work
12:35 Recap and Summary
How Are Startups WorthBillions of Dollars?
“I don’t understand how tech startups can be worth billions of dollars – many of them aren’t even making money yet!”
“How can an unprofitable company that isn’t even generating revenue possibly be worth so much? Doesn’t this violate all the principles of valuation?”
We get questions like the ones above all the time. The short answer is NO, startup valuation doesn’t violate all the principles.
You can still use standard methodologies such as the DCF, but you have to use radically different assumptions that make the analysis less grounded in reality.
For the numbers to work, the startup has to start making A LOT of money very quickly in the NEAR FUTURE.
If it takes 10-15 years to generate revenue, it will be almost impossible for the numbers to work; but if it happens in the next 2-3 years, it might be plausible.
As an example, we look at Pied Piper in this lesson, the fictional company from the HBO show “Silicon Valley.”
They make money with a file compression and storage app, and they’re aiming to get hundreds of millions of users and then get a tiny percentage of them using their paid services.
So if they currently generate no revenue and have just received $100 million in funding at a $1 billion valuation, is that crazy?
A DCF for Pied Piper
We assume massive app download growth in the early years, with the company reaching ~500 million annual downloads and ~150 million paid users by the end of Year 10. Revenue goes from 0 to nearly $2 billion over that time frame.
The company goes from negative Operating Income to nearly $500 million (25% margin) and almost $300 million in FreeCash Flow.
We use a 100xEBITDA multiple to calculate the Terminal Value (arguably fair for a $2 billion company growing at nearly 40% per year).
These assumptions are highly speculative, and so we also have to use a much higher Discount Rate: 50%, compared with the standard 8-12% figures you see for mature companies.
As a result of all this, far more value comes from the Present Value of the Terminal Value: 99% here, vs. 50-70% for normal companies (and ideally less than that!).
The whole valuation is dependent on a huge number of assumptions that are impossible to know in advance: Will billions of people download the app? Will ~5% of users convert to paying customers? Will the company be able to monetize in only 2-3 years’ time?
These assumptions might turn out to be true, but there’s a very high chance they might not be – which explains the 50% Discount Rate.
Startup Valuation Myths
So the DCF does “work” for startups; it’s just not that useful because of all the required assumptions and the inability to guesstimate the numbers for a pre-revenue company.
For a valuation to make sense, the company has to start generating money *very quickly* – if it takes ten years for that to happen, the numbers will be even harder to justify.
And since the majority of the implied value comes from the Terminal Value, the Terminal Multiple and Terminal Growth Rate are incredibly important. They matter more than long-term profit margins because almost no value comes from the Present Value of Free Cash Flows.
RESOURCES:
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-17-How-Are-Startups-Worth-Billions-Slides.pdf
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-17-How-Are-Startups-Worth-Billions.xlsx

17:56

WACC, Cost of Equity, and Cost of Debt in a DCF

WACC, Cost of Equity, and Cost of Debt in a DCF

WACC, Cost of Equity, and Cost of Debt in a DCF

In this WACC and Cost of Equity tutorial, you'll learn how changes to assumptions in a DCF impact variables like the Cost of Equity, Cost of Debt.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
You'll also learn about WACC (Weighted Average Cost of Capital) - and why it is not always so straightforward to answer these questions in interviews.
Table of Contents:
2:22 Why Everything is Interrelated
4:22 Summary of Factors That Impact a DCF
6:37 Changes to Debt Percentages in the Capital Structure
11:38 The Risk-Free Rate, Equity Risk Premium, and Beta
12:49 The Tax Rate
14:55 Recap and Summary
Why Do WACC, the Cost of Equity, and the Cost of Debt Matter?
This is a VERY common interview question:
"If a company goes from 10% debt to 30% debt, does its WACC increase or decrease?"
"What if the Risk-Free Rate changes? How is everything else impacted?"
"What if the company is bigger / smaller?"
Plus, you need to use these concepts on the job all the time when valuing companies… these "costs" represent your
opportunity cost from investing in a specific company, and you use them to evaluate that company's cash flows and determine
how much the company is worth to you.
EX: If you can get a 10% yield by investing in other, similar companies in this market, you'd evaluate this company's cash flows against that 10% "discount rate"…
…and if this company's debt, tax rate, or overall size changes, you better know how the discount rate also changes! It could easily change the company's value to you, the investor.
The Most Important Concept…
Everything is interrelated - in other words, more debt will impact BOTH the equity AND the debt investors!
Why?
Because additional leverage makes the company riskier for everyone involved. The chance of bankruptcy is higher, so the "cost" even to the equity investors increases.
AND: Other variables like the Risk-Free Rate will end up impacting everything, including Cost of Equity and Cost of Debt, because both of them are tied to overall interest rates on "safe" government bonds.
Tricky: Some changes only make an impact when a company actually has debt (changes to the tax rate), and you can't always predict how the value derived from a DCF will change in response to this.
Changes to the DCF Analysis and the Impact on Cost of Equity, Cost of Debt, WACC, and Implied Value:
SmallerCompany:
Cost of Debt, Equity, and WACC are all higher.
Bigger Company:
Cost of Debt, Equity, and WACC are all lower.
* Assuming the same capital structure percentages - if the capital structure is NOT the same, this could go either way.
EmergingMarket:
Cost of Debt, Equity, and WACC are all higher.
No Debt to Some Debt:
Cost of Equity and Cost of Debt are higher. WACC is lower at first, but eventually higher.
Some Debt to No Debt:
Cost of Equity and Cost of Debt are lower. It's impossible to say how WACC changes because it depends on where you are in the "U-shaped curve" - if you're above the debt % that minimizes WACC, WACC will decrease.
Otherwise, if you're at that minimum or below it, WACC will increase.
Higher Risk-Free Rate:
Cost of Equity, Debt, and WACC are all higher; they're all lower with a lower Risk-Free Rate.
Higher Equity Risk Premium and Higher Beta:
Cost of Equity is higher, and so is WACC; Cost of Debt doesn't change in a predictable way in response to these.
When these are lower, Cost of Equity and WACC are both lower.
Higher Tax Rate:
Cost of Equity, Debt, and WACC are all lower; they're higher when the tax rate is lower.
** Assumes the company has debt - if it does not, taxes don't make an impact because there is no tax benefit to interest paid on debt.

3:42

Pre And Post Money Valuation Explained For Entrepreneurs - Harvard Business School

Pre And Post Money Valuation Explained For Entrepreneurs - Harvard Business School

Pre And Post Money Valuation Explained For Entrepreneurs - Harvard Business School

Pre and post money valuation explained for entrepreneurs,Harvard Business School. Pre-money refers to a company's value before it receives outside financing or the latest round of financing, while post-money refers to its value after it gets outside funds or its latest capital injection.To Know more about pre & post money valuation watch this video.
For more free finance lessons and 1:1 live mentorship with industry experts, visit us: https://mentor.bluebookacademy.com/live-1-1-mentoring/

4:17

How To Distribute Startup Equity (The Smart Way) | Dan Martell

How To Distribute Startup Equity (The Smart Way) | Dan Martell

How To Distribute Startup Equity (The Smart Way) | Dan Martell

Having issues deciding how to split up the equity in your business between your team (co-founder), advisors and potential investors? In this video, I provide some guidelines and some major DON'TS when thinking about startup equity.
Are you an entrepreneur? Get free weekly video training here:
http://www.danmartell.com/newsletter
+ Join me on FB: http://FB.com/DanMartell
+ Connect w/ me live: http://periscope.tv/danmartell
+ Tweet me: http://twitter.com/danmartell
+ Instagram awesomeness: http://instagram.com/danmartell
Related Videos
- To Raise or Not To Raise Venture Capital https://www.youtube.com/watch?v=syfMR9Akxqo
- The 3 Secret Agreements You Make When Accepting Venture https://www.youtube.com/watch?v=syfMR9Akxqo
- StartupBalance With Kids https://www.youtube.com/watch?v=X2NsSWYs-20
Okay.
Due to popular demand, I’ve decided to finally tackle the billion dollar beast.
And while it’s not easy to have a conversation about startup equity without putting the faint of heart to sleep, it’s territory that simply can’t be overlooked.
Because for any growth-oriented entrepreneur entertaining the idea of handing out equity in their company, the math absolutely matters…
And one small misstep can be the difference between accelerated growth or the speed pass to startup hell.
So if you’ve ever wondered what a healthy equity breakdown looks like for all key stakeholders (founders, advisors, investors and team members)...
… then give this new video a quick spin.
As you can see, used appropriately, equity can be an amazing way to incentivize team members and attract key advisors and investors.
Like I did with Uber’s Travis Kalanick
But if you don’t enter the conversation with clear knowledge of the right benchmarks to shoot for…
… then you’re setting yourself up to either give too much away or lose talent and investors to other startups playing a much sharper numbers game.
So get your numbers right.
Make the right offers.
And then step up to the plate and use equity for the growth accelerant it is.
To splitting the pie…
(and watching it grow),
– Dan
Don't forget to share this entrepreneurial advice with your friends, so they can learn too: https://youtu.be/hWA1b8owinc
=====================
ABOUT DAN MARTELL
=====================
“You can only keep what you give away.” That’s the mantra that’s shaped Dan Martell from a struggling 20-something business owner in the Canadian Maritimes (which is waaay out east) to a successful startup founder who’s raised more than $3 million in venture funding and exited not one... not two... but three tech businesses: Clarity.fm, Spheric and Flowtown.
You can only keep what you give away. That philosophy has led Dan to invest in 33+ early stage startups such as Udemy, Intercom, Unbounce and Foodspotting. It’s also helped him shape the future of Hootsuite as an advisor to the social media tour de force.
An activator, a tech geek, an adrenaline junkie and, yes, a romantic (ask his wife Renee), Dan has recently turned his attention to teaching startups a fundamental, little-discussed lesson that directly impacts their growth: how to scale. You’ll find not only incredible insights in every moment of every talk Dan gives - but also highly actionable takeaways that will propel your business forward. Because Dan gives freely of all that he knows. After all, you can only keep what you give away.
Get free training videos, invites to private events, and cutting edge business strategies:
http://www.danmartell.com/newsletter

1:01:30

Aswath Damodaran: "Valuation: Four Lessons to Take Away" | Talks at Google

Aswath Damodaran: "Valuation: Four Lessons to Take Away" | Talks at Google

Aswath Damodaran: "Valuation: Four Lessons to Take Away" | Talks at Google

The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this talk, I propose to lay out four simple propositions about valuation. The first is that valuation is not an extension of accounting, insofar as it is not about recording the past but forecasting the future. The second is that valuation is not just modeling, where people put numbers into Excel spreadsheets and pump out values. A good valuation requires a narrative that binds the numbers together. The third is that valuing an asset or business is very different from pricing that asset or business, a difference that is often blurred in practice. The fourth is that luck plays a disproportionate role in whether you make money off your valuations. Put differently, you can do everything right and still walk away with nothing or worse at the end.
About the Author
I view myself, first and foremost, as a teacher. I do teach valuation and corporate finance not only to MBAs at Stern but to anyone who will listen (on iTunes U, online and on YouTube). I love to write books, teaching material and blog posts. After 30 years of teaching finance, I still find it fascinating as an interplay of economics, psychology and number crunching.

Startup Funding Explained: Everything You Need to Know

The Rest Of Us on Patreon:
https://www.patreon.com/TheRestOfUs
The Rest Of Us on Twitter:
http://twitter.com/TROUchannel
The Rest Of Us T-Shirts and More:
http://teespring.com/TheRestOfUsClothing
Part 2:
https://www.youtube.com/watch?v=fcjmVj5fM5k
Credits:
Music by The FatRat.
https://www.youtube.com/channel/UCa_UMppcMsHIzb5LDx1u9zQ
If you're a YouTuber, definitely check The FatRat. The channel offers a wide variety of free-to-use music for your videos.

published: 02 Jun 2016

IPO Valuation Model

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you about the company and its possible valuation multiples before and after going public.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
4:17 The Rationale and Assumptions Behind an IPO
7:47 Pricing vs. Trading Equity Value in an IPO
12:38 Primary vs. Secondary Shares and the Greenshoe or Overallotment Provision
16:10 Deal Size & Net Proceeds to Issuer
19:31 Implied ValuationMultiples
21:08 Alternate IPO ModelDriven by Offering Price per Share and Shares Sold/Issued
24:05 Recap and Summary
Lesson Outline:
We get a lot of questions a...

Raising money from an angel investor. Pre-money and post-money valuation. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/getting-a-seed-round-from-a-vc?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/ebitda?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks th...

published: 29 Jan 2009

An IPO | Stocks and bonds | Finance & Capital Markets | Khan Academy

The initial public offering of our online sock company. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/more-on-ipos?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/going-back-to-the-till-series-b?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks t...

Mechanics of a share-based acquisition. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/mergers-acquisitions/v/price-behavior-after-announced-acquisition?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/dilution-tutorial/v/stock-dilution?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: Companies often buy or merge with other companies using shares (which is sometimes less intuitive than when they use cash). This tutorial walks through the mechanics of how this happens and details what is likely to happen in ...

published: 12 May 2011

IPO Basics: What is an IPO (Initial Public Offering) Definition

Do your research before investing in IPO stocks to avoid getting in at the wrong time.
IPO (Initial Public Offering)
-The first time the stock is released to the public and is available for purchase
The Problem With IPOs:
-The stock market is based on future expected growth
-IPOs need time to set up
-Preferred shareholders typically sell their shares as soon as the IPO comes out, which causes the stock to go down
-Sometimes preferred shareholders are required to hold their shares for 60-90 days, the stock can decrease at this time instead of dropping initially.
-As time go on, more shareholders can sell their stock. You need to read the find print to find out when this happens.
-Let the charts set up, give them time and do not hurry
-Don't jump into things too quickly, IPOs should be av...

published: 05 Oct 2012

SEC Cracks Down on Pre-IPO Trading

Federal regulators are cracking down on an obscure but booming market for trading shares in companies before they go public, TK on Markets Hub.

published: 15 Mar 2012

Session 20: Valuing Private Business (for sale and IPO)

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuation for an IPO.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2Modtest.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession20.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20test.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20soln.pdf

published: 21 Apr 2015

How The Stock Exchange Works (For Dummies)

Why are there stocks at all?
Everyday in the news we hear about the stock exchange, stocks and money moving around the globe. Still, a lot of people don't have an idea why we have stock markets at all, because the topic is usually very dry. We made a short video about the basics of the stock exchanges. With robots. Robots are kewl!
Short videos, explaining things. For example Evolution, the Universe, the Stock Market or controversial topics like Fracking. Because we love science.
We would love to interact more with you, our viewers to figure out what topics you want to see. If you have a suggestion for future videos or feedback, drop us a line! :)
We're a bunch of Information designers from munich, visit us on facebook or behance to say hi!
https://www.facebook.com/Kurzgesagt
https:/...

published: 28 Nov 2013

Startup Valuation - How Are Startups Worth Billions?

You’ll learn about StartupValuation in this lesson, and see how a traditional methodology such as the Discounted Cash Flow (DCF) analysis applies to early-stage tech startups with no revenue.
http://breakingintowallstreet.com/
"Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
2:59 A DCF Analysis for Piped Piper
9:01 What’s Required for a Startup DCF/Valuation to Work
12:35 Recap and Summary
How Are Startups WorthBillions of Dollars?
“I don’t understand how tech startups can be worth billions of dollars – many of them aren’t even making money yet!”
“How can an unprofitable company that isn’t even generating revenue possibly be worth so much? Doesn’t this violate all the principles of valuation?”
We get questions like the ones a...

Pre And Post Money Valuation Explained For Entrepreneurs - Harvard Business School

Pre and post money valuation explained for entrepreneurs,Harvard Business School. Pre-money refers to a company's value before it receives outside financing or the latest round of financing, while post-money refers to its value after it gets outside funds or its latest capital injection.To Know more about pre & post money valuation watch this video.
For more free finance lessons and 1:1 live mentorship with industry experts, visit us: https://mentor.bluebookacademy.com/live-1-1-mentoring/

published: 01 Apr 2015

How To Distribute Startup Equity (The Smart Way) | Dan Martell

Having issues deciding how to split up the equity in your business between your team (co-founder), advisors and potential investors? In this video, I provide some guidelines and some major DON'TS when thinking about startup equity.
Are you an entrepreneur? Get free weekly video training here:
http://www.danmartell.com/newsletter
+ Join me on FB: http://FB.com/DanMartell
+ Connect w/ me live: http://periscope.tv/danmartell
+ Tweet me: http://twitter.com/danmartell
+ Instagram awesomeness: http://instagram.com/danmartell
Related Videos
- To Raise or Not To Raise Venture Capital https://www.youtube.com/watch?v=syfMR9Akxqo
- The 3 Secret Agreements You Make When Accepting Venture https://www.youtube.com/watch?v=syfMR9Akxqo
- StartupBalance With Kids https://www.youtube.com/watch?v=X2NsSWY...

published: 11 Jan 2016

Aswath Damodaran: "Valuation: Four Lessons to Take Away" | Talks at Google

The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this talk, I propose to lay out four simple propositions about valuation. The first is that valuation is not an extension of accounting, insofar as it is not about recording the past but forecasting the future. The second is that valuation is not just modeling, where people put numbers into Excel spreadsheets and pump out values. A good valuation requires a narrative that binds the numbers together. The third is that valuing an asset or business is very different from pricing that asset or business, a difference that is often blurred in practice. The fourth is that luck plays a disproportionate role in whether you make money off your valu...

Startup Funding Explained: Everything You Need to Know

The Rest Of Us on Patreon:
https://www.patreon.com/TheRestOfUs
The Rest Of Us on Twitter:
http://twitter.com/TROUchannel
The Rest Of Us T-Shirts and More:
htt...

The Rest Of Us on Patreon:
https://www.patreon.com/TheRestOfUs
The Rest Of Us on Twitter:
http://twitter.com/TROUchannel
The Rest Of Us T-Shirts and More:
http://teespring.com/TheRestOfUsClothing
Part 2:
https://www.youtube.com/watch?v=fcjmVj5fM5k
Credits:
Music by The FatRat.
https://www.youtube.com/channel/UCa_UMppcMsHIzb5LDx1u9zQ
If you're a YouTuber, definitely check The FatRat. The channel offers a wide variety of free-to-use music for your videos.

The Rest Of Us on Patreon:
https://www.patreon.com/TheRestOfUs
The Rest Of Us on Twitter:
http://twitter.com/TROUchannel
The Rest Of Us T-Shirts and More:
http://teespring.com/TheRestOfUsClothing
Part 2:
https://www.youtube.com/watch?v=fcjmVj5fM5k
Credits:
Music by The FatRat.
https://www.youtube.com/channel/UCa_UMppcMsHIzb5LDx1u9zQ
If you're a YouTuber, definitely check The FatRat. The channel offers a wide variety of free-to-use music for your videos.

IPO Valuation Model

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you ...

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you about the company and its possible valuation multiples before and after going public.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
4:17 The Rationale and Assumptions Behind an IPO
7:47 Pricing vs. Trading Equity Value in an IPO
12:38 Primary vs. Secondary Shares and the Greenshoe or Overallotment Provision
16:10 Deal Size & Net Proceeds to Issuer
19:31 Implied ValuationMultiples
21:08 Alternate IPO ModelDriven by Offering Price per Share and Shares Sold/Issued
24:05 Recap and Summary
Lesson Outline:
We get a lot of questions about "IPO valuation" or "IPO modeling," but the truth is that it’s really simple because you don't, in fact, "value" a company in an IPO.
Instead, you simply value a company and then decide how its valuation might be different in an IPO (e.g., no private company discount).
Step 1: Assumptions & Setup
You almost always start an IPO model with an idea of how much in funding the company wants to raise, and the multiples it may be valued at (based on public comps).
The multiples used vary by industry, but 1-year forward P / E multiples are very common (e.g., go to the next full fiscal year and assume a multiple for that projected full-year figure).
Here, we’d pick forward multiples from similar, profitable social networking / mobile messaging companies (not covered in this tutorial in the interest of time).
Amount of Capital to Raise: Very discretionary and it comes down to the company's plans, how many existing shareholders want to sell, whether it's PE or VC-backed, etc.
This is often set to 20-40% of a company's value; common to sell ~1/4 or ~1/3 of the company in a public offering, though that also varies.
Step 2: Trading vs. Pricing and the Pricing Discount
You apply the assumed multiple to the company's relevant metric, so ForwardNet Income in this case, which gets you the "Post-Money Equity Value @ Trading."
This is what the company's market cap should be after it has raised the capital and is trading on the stock market.
So we can then calculate the Post-Money Equity Value at Trading (the market rate) vs. Pricing (the discounted rate that institutional investors get).
And then calculate the Implied Offering Price per Share based on this - take this value, subtract the funds raised, and divide by the company's current share count.
Step 3: Determining the Primary vs. Secondary Shares and the "Greenshoe" (Overallotment) Provision
"Primary Shares" are newly created shares that represent actual capital being raised in the deal - this capital then goes to the company in the form of cash.
"Secondary Shares" represent existing investors selling their stakes to new investors (usually large institutions like Fidelity). No capital is raised here.
Formulas: Always determine the Primary Shares first, based on the Post-Money Equity Value @ Pricing and/or the amount of capital raised… and then figure out the Secondary Shares in relation to that.
Have to also figure out split between "Base Offering" and "Greenshoe" - "Greenshoe" is an option to issue even more shares if demand is strong enough. Used for cases where the company wants to keep the same offering price, but simply raise more capital if more investors are interested.
Very commonly set to ~15% in offerings in developed markets.
Step 4: Net Proceeds to Issuer
Look at Total Offering Size first (Primary + Secondary + Overallotment) and then subtract out fees.
Underwriting Discount: Banks used to, and sometimes still do, buy a portion of the company's stock as "insurance" in case the company can't sell it to anyone else… so this is supposed to compensate them for the risk of holding the stock temporarily, in case it can't find any buyers.
Bigger deal = lower fee % in most cases.
% Company Sold: Based on Primary Proceeds and Post-Money Equity Value @ Pricing - how much the company sold of itself just before it started trading publicly.
Step 5: Valuation Multiples
We move from Equity Value to Enterprise Value as we normally do… but we must factor in the cash raised in the IPO now!
Equity Value implicitly reflects this cash, so it must be subtracted when calculating the new Enterprise Value.
Would have to compare these multiples to those of the public comps to decide whether or not they look reasonable.
RESOURCES:
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.xlsx
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.pdf

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you about the company and its possible valuation multiples before and after going public.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
4:17 The Rationale and Assumptions Behind an IPO
7:47 Pricing vs. Trading Equity Value in an IPO
12:38 Primary vs. Secondary Shares and the Greenshoe or Overallotment Provision
16:10 Deal Size & Net Proceeds to Issuer
19:31 Implied ValuationMultiples
21:08 Alternate IPO ModelDriven by Offering Price per Share and Shares Sold/Issued
24:05 Recap and Summary
Lesson Outline:
We get a lot of questions about "IPO valuation" or "IPO modeling," but the truth is that it’s really simple because you don't, in fact, "value" a company in an IPO.
Instead, you simply value a company and then decide how its valuation might be different in an IPO (e.g., no private company discount).
Step 1: Assumptions & Setup
You almost always start an IPO model with an idea of how much in funding the company wants to raise, and the multiples it may be valued at (based on public comps).
The multiples used vary by industry, but 1-year forward P / E multiples are very common (e.g., go to the next full fiscal year and assume a multiple for that projected full-year figure).
Here, we’d pick forward multiples from similar, profitable social networking / mobile messaging companies (not covered in this tutorial in the interest of time).
Amount of Capital to Raise: Very discretionary and it comes down to the company's plans, how many existing shareholders want to sell, whether it's PE or VC-backed, etc.
This is often set to 20-40% of a company's value; common to sell ~1/4 or ~1/3 of the company in a public offering, though that also varies.
Step 2: Trading vs. Pricing and the Pricing Discount
You apply the assumed multiple to the company's relevant metric, so ForwardNet Income in this case, which gets you the "Post-Money Equity Value @ Trading."
This is what the company's market cap should be after it has raised the capital and is trading on the stock market.
So we can then calculate the Post-Money Equity Value at Trading (the market rate) vs. Pricing (the discounted rate that institutional investors get).
And then calculate the Implied Offering Price per Share based on this - take this value, subtract the funds raised, and divide by the company's current share count.
Step 3: Determining the Primary vs. Secondary Shares and the "Greenshoe" (Overallotment) Provision
"Primary Shares" are newly created shares that represent actual capital being raised in the deal - this capital then goes to the company in the form of cash.
"Secondary Shares" represent existing investors selling their stakes to new investors (usually large institutions like Fidelity). No capital is raised here.
Formulas: Always determine the Primary Shares first, based on the Post-Money Equity Value @ Pricing and/or the amount of capital raised… and then figure out the Secondary Shares in relation to that.
Have to also figure out split between "Base Offering" and "Greenshoe" - "Greenshoe" is an option to issue even more shares if demand is strong enough. Used for cases where the company wants to keep the same offering price, but simply raise more capital if more investors are interested.
Very commonly set to ~15% in offerings in developed markets.
Step 4: Net Proceeds to Issuer
Look at Total Offering Size first (Primary + Secondary + Overallotment) and then subtract out fees.
Underwriting Discount: Banks used to, and sometimes still do, buy a portion of the company's stock as "insurance" in case the company can't sell it to anyone else… so this is supposed to compensate them for the risk of holding the stock temporarily, in case it can't find any buyers.
Bigger deal = lower fee % in most cases.
% Company Sold: Based on Primary Proceeds and Post-Money Equity Value @ Pricing - how much the company sold of itself just before it started trading publicly.
Step 5: Valuation Multiples
We move from Equity Value to Enterprise Value as we normally do… but we must factor in the cash raised in the IPO now!
Equity Value implicitly reflects this cash, so it must be subtracted when calculating the new Enterprise Value.
Would have to compare these multiples to those of the public comps to decide whether or not they look reasonable.
RESOURCES:
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.xlsx
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.pdf

Raising money from an angel investor. Pre-money and post-money valuation. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-fi...

Raising money from an angel investor. Pre-money and post-money valuation. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/getting-a-seed-round-from-a-vc?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/ebitda?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks through starting, financing and taking public a company (and even talks about what happens if it has trouble paying its debts).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Raising money from an angel investor. Pre-money and post-money valuation. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/getting-a-seed-round-from-a-vc?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/ebitda?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks through starting, financing and taking public a company (and even talks about what happens if it has trouble paying its debts).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

An IPO | Stocks and bonds | Finance & Capital Markets | Khan Academy

The initial public offering of our online sock company. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-...

The initial public offering of our online sock company. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/more-on-ipos?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/going-back-to-the-till-series-b?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks through starting, financing and taking public a company (and even talks about what happens if it has trouble paying its debts).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

The initial public offering of our online sock company. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/more-on-ipos?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/going-back-to-the-till-series-b?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks through starting, financing and taking public a company (and even talks about what happens if it has trouble paying its debts).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Mechanics of a share-based acquisition. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-an...

Mechanics of a share-based acquisition. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/mergers-acquisitions/v/price-behavior-after-announced-acquisition?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/dilution-tutorial/v/stock-dilution?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: Companies often buy or merge with other companies using shares (which is sometimes less intuitive than when they use cash). This tutorial walks through the mechanics of how this happens and details what is likely to happen in the public markets because of the transaction (including opportunities for arbitrage).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Mechanics of a share-based acquisition. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/mergers-acquisitions/v/price-behavior-after-announced-acquisition?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/dilution-tutorial/v/stock-dilution?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: Companies often buy or merge with other companies using shares (which is sometimes less intuitive than when they use cash). This tutorial walks through the mechanics of how this happens and details what is likely to happen in the public markets because of the transaction (including opportunities for arbitrage).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

IPO Basics: What is an IPO (Initial Public Offering) Definition

Do your research before investing in IPO stocks to avoid getting in at the wrong time.
IPO (Initial Public Offering)
-The first time the stock is released to t...

Do your research before investing in IPO stocks to avoid getting in at the wrong time.
IPO (Initial Public Offering)
-The first time the stock is released to the public and is available for purchase
The Problem With IPOs:
-The stock market is based on future expected growth
-IPOs need time to set up
-Preferred shareholders typically sell their shares as soon as the IPO comes out, which causes the stock to go down
-Sometimes preferred shareholders are required to hold their shares for 60-90 days, the stock can decrease at this time instead of dropping initially.
-As time go on, more shareholders can sell their stock. You need to read the find print to find out when this happens.
-Let the charts set up, give them time and do not hurry
-Don't jump into things too quickly, IPOs should be avoided initially
-Understand why you are buying the stock. Don't just purchase it because it's a company you use (e.g. Zynga or Groupon)
-A better time to get in is after the stock has decreased over a period of time and begins to go back up. You don't need to get in right away.
Example:
-Facebook (FB)
-Everyone expected FB to go way up, but it went very low because preferred shareholders sold their shares right away
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us!
STOCK TRADING COURSES:
-- http://tradersfly.com/courses/
STOCK TRADING BOOKS:
-- http://tradersfly.com/books/
WEBSITES:
-- http://rise2learn.com
-- http://criticalcharts.com
-- http://investinghelpdesk.com
-- http://tradersfly.com
-- http://backstageincome.com
-- http://sashaevdakov.com
SOCIAL MEDIA:
-- http://twitter.com/criticalcharts/
-- http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
-- TradersFly: http://bit.ly/tradersfly
-- BackstageIncome: http://bit.ly/backstageincome

Do your research before investing in IPO stocks to avoid getting in at the wrong time.
IPO (Initial Public Offering)
-The first time the stock is released to the public and is available for purchase
The Problem With IPOs:
-The stock market is based on future expected growth
-IPOs need time to set up
-Preferred shareholders typically sell their shares as soon as the IPO comes out, which causes the stock to go down
-Sometimes preferred shareholders are required to hold their shares for 60-90 days, the stock can decrease at this time instead of dropping initially.
-As time go on, more shareholders can sell their stock. You need to read the find print to find out when this happens.
-Let the charts set up, give them time and do not hurry
-Don't jump into things too quickly, IPOs should be avoided initially
-Understand why you are buying the stock. Don't just purchase it because it's a company you use (e.g. Zynga or Groupon)
-A better time to get in is after the stock has decreased over a period of time and begins to go back up. You don't need to get in right away.
Example:
-Facebook (FB)
-Everyone expected FB to go way up, but it went very low because preferred shareholders sold their shares right away
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us!
STOCK TRADING COURSES:
-- http://tradersfly.com/courses/
STOCK TRADING BOOKS:
-- http://tradersfly.com/books/
WEBSITES:
-- http://rise2learn.com
-- http://criticalcharts.com
-- http://investinghelpdesk.com
-- http://tradersfly.com
-- http://backstageincome.com
-- http://sashaevdakov.com
SOCIAL MEDIA:
-- http://twitter.com/criticalcharts/
-- http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
-- TradersFly: http://bit.ly/tradersfly
-- BackstageIncome: http://bit.ly/backstageincome

Session 20: Valuing Private Business (for sale and IPO)

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuati...

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuation for an IPO.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2Modtest.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession20.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20test.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20soln.pdf

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuation for an IPO.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2Modtest.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession20.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20test.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20soln.pdf

How The Stock Exchange Works (For Dummies)

Why are there stocks at all?
Everyday in the news we hear about the stock exchange, stocks and money moving around the globe. Still, a lot of people don't have...

Why are there stocks at all?
Everyday in the news we hear about the stock exchange, stocks and money moving around the globe. Still, a lot of people don't have an idea why we have stock markets at all, because the topic is usually very dry. We made a short video about the basics of the stock exchanges. With robots. Robots are kewl!
Short videos, explaining things. For example Evolution, the Universe, the Stock Market or controversial topics like Fracking. Because we love science.
We would love to interact more with you, our viewers to figure out what topics you want to see. If you have a suggestion for future videos or feedback, drop us a line! :)
We're a bunch of Information designers from munich, visit us on facebook or behance to say hi!
https://www.facebook.com/Kurzgesagt
https://www.behance.net/kurzgesagt
How the Stock Exchange works
Help us caption & translate this video!
http://www.youtube.com/timedtext_cs_panel?c=UCsXVk37bltHxD1rDPwtNM8Q&tab=2

Why are there stocks at all?
Everyday in the news we hear about the stock exchange, stocks and money moving around the globe. Still, a lot of people don't have an idea why we have stock markets at all, because the topic is usually very dry. We made a short video about the basics of the stock exchanges. With robots. Robots are kewl!
Short videos, explaining things. For example Evolution, the Universe, the Stock Market or controversial topics like Fracking. Because we love science.
We would love to interact more with you, our viewers to figure out what topics you want to see. If you have a suggestion for future videos or feedback, drop us a line! :)
We're a bunch of Information designers from munich, visit us on facebook or behance to say hi!
https://www.facebook.com/Kurzgesagt
https://www.behance.net/kurzgesagt
How the Stock Exchange works
Help us caption & translate this video!
http://www.youtube.com/timedtext_cs_panel?c=UCsXVk37bltHxD1rDPwtNM8Q&tab=2

You’ll learn about StartupValuation in this lesson, and see how a traditional methodology such as the Discounted Cash Flow (DCF) analysis applies to early-stage tech startups with no revenue.
http://breakingintowallstreet.com/
"Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
2:59 A DCF Analysis for Piped Piper
9:01 What’s Required for a Startup DCF/Valuation to Work
12:35 Recap and Summary
How Are Startups WorthBillions of Dollars?
“I don’t understand how tech startups can be worth billions of dollars – many of them aren’t even making money yet!”
“How can an unprofitable company that isn’t even generating revenue possibly be worth so much? Doesn’t this violate all the principles of valuation?”
We get questions like the ones above all the time. The short answer is NO, startup valuation doesn’t violate all the principles.
You can still use standard methodologies such as the DCF, but you have to use radically different assumptions that make the analysis less grounded in reality.
For the numbers to work, the startup has to start making A LOT of money very quickly in the NEAR FUTURE.
If it takes 10-15 years to generate revenue, it will be almost impossible for the numbers to work; but if it happens in the next 2-3 years, it might be plausible.
As an example, we look at Pied Piper in this lesson, the fictional company from the HBO show “Silicon Valley.”
They make money with a file compression and storage app, and they’re aiming to get hundreds of millions of users and then get a tiny percentage of them using their paid services.
So if they currently generate no revenue and have just received $100 million in funding at a $1 billion valuation, is that crazy?
A DCF for Pied Piper
We assume massive app download growth in the early years, with the company reaching ~500 million annual downloads and ~150 million paid users by the end of Year 10. Revenue goes from 0 to nearly $2 billion over that time frame.
The company goes from negative Operating Income to nearly $500 million (25% margin) and almost $300 million in FreeCash Flow.
We use a 100xEBITDA multiple to calculate the Terminal Value (arguably fair for a $2 billion company growing at nearly 40% per year).
These assumptions are highly speculative, and so we also have to use a much higher Discount Rate: 50%, compared with the standard 8-12% figures you see for mature companies.
As a result of all this, far more value comes from the Present Value of the Terminal Value: 99% here, vs. 50-70% for normal companies (and ideally less than that!).
The whole valuation is dependent on a huge number of assumptions that are impossible to know in advance: Will billions of people download the app? Will ~5% of users convert to paying customers? Will the company be able to monetize in only 2-3 years’ time?
These assumptions might turn out to be true, but there’s a very high chance they might not be – which explains the 50% Discount Rate.
Startup Valuation Myths
So the DCF does “work” for startups; it’s just not that useful because of all the required assumptions and the inability to guesstimate the numbers for a pre-revenue company.
For a valuation to make sense, the company has to start generating money *very quickly* – if it takes ten years for that to happen, the numbers will be even harder to justify.
And since the majority of the implied value comes from the Terminal Value, the Terminal Multiple and Terminal Growth Rate are incredibly important. They matter more than long-term profit margins because almost no value comes from the Present Value of Free Cash Flows.
RESOURCES:
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-17-How-Are-Startups-Worth-Billions-Slides.pdf
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-17-How-Are-Startups-Worth-Billions.xlsx

You’ll learn about StartupValuation in this lesson, and see how a traditional methodology such as the Discounted Cash Flow (DCF) analysis applies to early-stage tech startups with no revenue.
http://breakingintowallstreet.com/
"Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
2:59 A DCF Analysis for Piped Piper
9:01 What’s Required for a Startup DCF/Valuation to Work
12:35 Recap and Summary
How Are Startups WorthBillions of Dollars?
“I don’t understand how tech startups can be worth billions of dollars – many of them aren’t even making money yet!”
“How can an unprofitable company that isn’t even generating revenue possibly be worth so much? Doesn’t this violate all the principles of valuation?”
We get questions like the ones above all the time. The short answer is NO, startup valuation doesn’t violate all the principles.
You can still use standard methodologies such as the DCF, but you have to use radically different assumptions that make the analysis less grounded in reality.
For the numbers to work, the startup has to start making A LOT of money very quickly in the NEAR FUTURE.
If it takes 10-15 years to generate revenue, it will be almost impossible for the numbers to work; but if it happens in the next 2-3 years, it might be plausible.
As an example, we look at Pied Piper in this lesson, the fictional company from the HBO show “Silicon Valley.”
They make money with a file compression and storage app, and they’re aiming to get hundreds of millions of users and then get a tiny percentage of them using their paid services.
So if they currently generate no revenue and have just received $100 million in funding at a $1 billion valuation, is that crazy?
A DCF for Pied Piper
We assume massive app download growth in the early years, with the company reaching ~500 million annual downloads and ~150 million paid users by the end of Year 10. Revenue goes from 0 to nearly $2 billion over that time frame.
The company goes from negative Operating Income to nearly $500 million (25% margin) and almost $300 million in FreeCash Flow.
We use a 100xEBITDA multiple to calculate the Terminal Value (arguably fair for a $2 billion company growing at nearly 40% per year).
These assumptions are highly speculative, and so we also have to use a much higher Discount Rate: 50%, compared with the standard 8-12% figures you see for mature companies.
As a result of all this, far more value comes from the Present Value of the Terminal Value: 99% here, vs. 50-70% for normal companies (and ideally less than that!).
The whole valuation is dependent on a huge number of assumptions that are impossible to know in advance: Will billions of people download the app? Will ~5% of users convert to paying customers? Will the company be able to monetize in only 2-3 years’ time?
These assumptions might turn out to be true, but there’s a very high chance they might not be – which explains the 50% Discount Rate.
Startup Valuation Myths
So the DCF does “work” for startups; it’s just not that useful because of all the required assumptions and the inability to guesstimate the numbers for a pre-revenue company.
For a valuation to make sense, the company has to start generating money *very quickly* – if it takes ten years for that to happen, the numbers will be even harder to justify.
And since the majority of the implied value comes from the Terminal Value, the Terminal Multiple and Terminal Growth Rate are incredibly important. They matter more than long-term profit margins because almost no value comes from the Present Value of Free Cash Flows.
RESOURCES:
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-17-How-Are-Startups-Worth-Billions-Slides.pdf
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-17-How-Are-Startups-Worth-Billions.xlsx

WACC, Cost of Equity, and Cost of Debt in a DCF

In this WACC and Cost of Equity tutorial, you'll learn how changes to assumptions in a DCF impact variables like the Cost of Equity, Cost of Debt.
By http://bre...

In this WACC and Cost of Equity tutorial, you'll learn how changes to assumptions in a DCF impact variables like the Cost of Equity, Cost of Debt.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
You'll also learn about WACC (Weighted Average Cost of Capital) - and why it is not always so straightforward to answer these questions in interviews.
Table of Contents:
2:22 Why Everything is Interrelated
4:22 Summary of Factors That Impact a DCF
6:37 Changes to Debt Percentages in the Capital Structure
11:38 The Risk-Free Rate, Equity Risk Premium, and Beta
12:49 The Tax Rate
14:55 Recap and Summary
Why Do WACC, the Cost of Equity, and the Cost of Debt Matter?
This is a VERY common interview question:
"If a company goes from 10% debt to 30% debt, does its WACC increase or decrease?"
"What if the Risk-Free Rate changes? How is everything else impacted?"
"What if the company is bigger / smaller?"
Plus, you need to use these concepts on the job all the time when valuing companies… these "costs" represent your
opportunity cost from investing in a specific company, and you use them to evaluate that company's cash flows and determine
how much the company is worth to you.
EX: If you can get a 10% yield by investing in other, similar companies in this market, you'd evaluate this company's cash flows against that 10% "discount rate"…
…and if this company's debt, tax rate, or overall size changes, you better know how the discount rate also changes! It could easily change the company's value to you, the investor.
The Most Important Concept…
Everything is interrelated - in other words, more debt will impact BOTH the equity AND the debt investors!
Why?
Because additional leverage makes the company riskier for everyone involved. The chance of bankruptcy is higher, so the "cost" even to the equity investors increases.
AND: Other variables like the Risk-Free Rate will end up impacting everything, including Cost of Equity and Cost of Debt, because both of them are tied to overall interest rates on "safe" government bonds.
Tricky: Some changes only make an impact when a company actually has debt (changes to the tax rate), and you can't always predict how the value derived from a DCF will change in response to this.
Changes to the DCF Analysis and the Impact on Cost of Equity, Cost of Debt, WACC, and Implied Value:
SmallerCompany:
Cost of Debt, Equity, and WACC are all higher.
Bigger Company:
Cost of Debt, Equity, and WACC are all lower.
* Assuming the same capital structure percentages - if the capital structure is NOT the same, this could go either way.
EmergingMarket:
Cost of Debt, Equity, and WACC are all higher.
No Debt to Some Debt:
Cost of Equity and Cost of Debt are higher. WACC is lower at first, but eventually higher.
Some Debt to No Debt:
Cost of Equity and Cost of Debt are lower. It's impossible to say how WACC changes because it depends on where you are in the "U-shaped curve" - if you're above the debt % that minimizes WACC, WACC will decrease.
Otherwise, if you're at that minimum or below it, WACC will increase.
Higher Risk-Free Rate:
Cost of Equity, Debt, and WACC are all higher; they're all lower with a lower Risk-Free Rate.
Higher Equity Risk Premium and Higher Beta:
Cost of Equity is higher, and so is WACC; Cost of Debt doesn't change in a predictable way in response to these.
When these are lower, Cost of Equity and WACC are both lower.
Higher Tax Rate:
Cost of Equity, Debt, and WACC are all lower; they're higher when the tax rate is lower.
** Assumes the company has debt - if it does not, taxes don't make an impact because there is no tax benefit to interest paid on debt.

In this WACC and Cost of Equity tutorial, you'll learn how changes to assumptions in a DCF impact variables like the Cost of Equity, Cost of Debt.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
You'll also learn about WACC (Weighted Average Cost of Capital) - and why it is not always so straightforward to answer these questions in interviews.
Table of Contents:
2:22 Why Everything is Interrelated
4:22 Summary of Factors That Impact a DCF
6:37 Changes to Debt Percentages in the Capital Structure
11:38 The Risk-Free Rate, Equity Risk Premium, and Beta
12:49 The Tax Rate
14:55 Recap and Summary
Why Do WACC, the Cost of Equity, and the Cost of Debt Matter?
This is a VERY common interview question:
"If a company goes from 10% debt to 30% debt, does its WACC increase or decrease?"
"What if the Risk-Free Rate changes? How is everything else impacted?"
"What if the company is bigger / smaller?"
Plus, you need to use these concepts on the job all the time when valuing companies… these "costs" represent your
opportunity cost from investing in a specific company, and you use them to evaluate that company's cash flows and determine
how much the company is worth to you.
EX: If you can get a 10% yield by investing in other, similar companies in this market, you'd evaluate this company's cash flows against that 10% "discount rate"…
…and if this company's debt, tax rate, or overall size changes, you better know how the discount rate also changes! It could easily change the company's value to you, the investor.
The Most Important Concept…
Everything is interrelated - in other words, more debt will impact BOTH the equity AND the debt investors!
Why?
Because additional leverage makes the company riskier for everyone involved. The chance of bankruptcy is higher, so the "cost" even to the equity investors increases.
AND: Other variables like the Risk-Free Rate will end up impacting everything, including Cost of Equity and Cost of Debt, because both of them are tied to overall interest rates on "safe" government bonds.
Tricky: Some changes only make an impact when a company actually has debt (changes to the tax rate), and you can't always predict how the value derived from a DCF will change in response to this.
Changes to the DCF Analysis and the Impact on Cost of Equity, Cost of Debt, WACC, and Implied Value:
SmallerCompany:
Cost of Debt, Equity, and WACC are all higher.
Bigger Company:
Cost of Debt, Equity, and WACC are all lower.
* Assuming the same capital structure percentages - if the capital structure is NOT the same, this could go either way.
EmergingMarket:
Cost of Debt, Equity, and WACC are all higher.
No Debt to Some Debt:
Cost of Equity and Cost of Debt are higher. WACC is lower at first, but eventually higher.
Some Debt to No Debt:
Cost of Equity and Cost of Debt are lower. It's impossible to say how WACC changes because it depends on where you are in the "U-shaped curve" - if you're above the debt % that minimizes WACC, WACC will decrease.
Otherwise, if you're at that minimum or below it, WACC will increase.
Higher Risk-Free Rate:
Cost of Equity, Debt, and WACC are all higher; they're all lower with a lower Risk-Free Rate.
Higher Equity Risk Premium and Higher Beta:
Cost of Equity is higher, and so is WACC; Cost of Debt doesn't change in a predictable way in response to these.
When these are lower, Cost of Equity and WACC are both lower.
Higher Tax Rate:
Cost of Equity, Debt, and WACC are all lower; they're higher when the tax rate is lower.
** Assumes the company has debt - if it does not, taxes don't make an impact because there is no tax benefit to interest paid on debt.

published:23 Sep 2014

views:83061

back

Pre And Post Money Valuation Explained For Entrepreneurs - Harvard Business School

Pre and post money valuation explained for entrepreneurs,Harvard Business School. Pre-money refers to a company's value before it receives outside financing or ...

Pre and post money valuation explained for entrepreneurs,Harvard Business School. Pre-money refers to a company's value before it receives outside financing or the latest round of financing, while post-money refers to its value after it gets outside funds or its latest capital injection.To Know more about pre & post money valuation watch this video.
For more free finance lessons and 1:1 live mentorship with industry experts, visit us: https://mentor.bluebookacademy.com/live-1-1-mentoring/

Pre and post money valuation explained for entrepreneurs,Harvard Business School. Pre-money refers to a company's value before it receives outside financing or the latest round of financing, while post-money refers to its value after it gets outside funds or its latest capital injection.To Know more about pre & post money valuation watch this video.
For more free finance lessons and 1:1 live mentorship with industry experts, visit us: https://mentor.bluebookacademy.com/live-1-1-mentoring/

How To Distribute Startup Equity (The Smart Way) | Dan Martell

Having issues deciding how to split up the equity in your business between your team (co-founder), advisors and potential investors? In this video, I provide so...

Having issues deciding how to split up the equity in your business between your team (co-founder), advisors and potential investors? In this video, I provide some guidelines and some major DON'TS when thinking about startup equity.
Are you an entrepreneur? Get free weekly video training here:
http://www.danmartell.com/newsletter
+ Join me on FB: http://FB.com/DanMartell
+ Connect w/ me live: http://periscope.tv/danmartell
+ Tweet me: http://twitter.com/danmartell
+ Instagram awesomeness: http://instagram.com/danmartell
Related Videos
- To Raise or Not To Raise Venture Capital https://www.youtube.com/watch?v=syfMR9Akxqo
- The 3 Secret Agreements You Make When Accepting Venture https://www.youtube.com/watch?v=syfMR9Akxqo
- StartupBalance With Kids https://www.youtube.com/watch?v=X2NsSWYs-20
Okay.
Due to popular demand, I’ve decided to finally tackle the billion dollar beast.
And while it’s not easy to have a conversation about startup equity without putting the faint of heart to sleep, it’s territory that simply can’t be overlooked.
Because for any growth-oriented entrepreneur entertaining the idea of handing out equity in their company, the math absolutely matters…
And one small misstep can be the difference between accelerated growth or the speed pass to startup hell.
So if you’ve ever wondered what a healthy equity breakdown looks like for all key stakeholders (founders, advisors, investors and team members)...
… then give this new video a quick spin.
As you can see, used appropriately, equity can be an amazing way to incentivize team members and attract key advisors and investors.
Like I did with Uber’s Travis Kalanick
But if you don’t enter the conversation with clear knowledge of the right benchmarks to shoot for…
… then you’re setting yourself up to either give too much away or lose talent and investors to other startups playing a much sharper numbers game.
So get your numbers right.
Make the right offers.
And then step up to the plate and use equity for the growth accelerant it is.
To splitting the pie…
(and watching it grow),
– Dan
Don't forget to share this entrepreneurial advice with your friends, so they can learn too: https://youtu.be/hWA1b8owinc
=====================
ABOUT DAN MARTELL
=====================
“You can only keep what you give away.” That’s the mantra that’s shaped Dan Martell from a struggling 20-something business owner in the Canadian Maritimes (which is waaay out east) to a successful startup founder who’s raised more than $3 million in venture funding and exited not one... not two... but three tech businesses: Clarity.fm, Spheric and Flowtown.
You can only keep what you give away. That philosophy has led Dan to invest in 33+ early stage startups such as Udemy, Intercom, Unbounce and Foodspotting. It’s also helped him shape the future of Hootsuite as an advisor to the social media tour de force.
An activator, a tech geek, an adrenaline junkie and, yes, a romantic (ask his wife Renee), Dan has recently turned his attention to teaching startups a fundamental, little-discussed lesson that directly impacts their growth: how to scale. You’ll find not only incredible insights in every moment of every talk Dan gives - but also highly actionable takeaways that will propel your business forward. Because Dan gives freely of all that he knows. After all, you can only keep what you give away.
Get free training videos, invites to private events, and cutting edge business strategies:
http://www.danmartell.com/newsletter

Having issues deciding how to split up the equity in your business between your team (co-founder), advisors and potential investors? In this video, I provide some guidelines and some major DON'TS when thinking about startup equity.
Are you an entrepreneur? Get free weekly video training here:
http://www.danmartell.com/newsletter
+ Join me on FB: http://FB.com/DanMartell
+ Connect w/ me live: http://periscope.tv/danmartell
+ Tweet me: http://twitter.com/danmartell
+ Instagram awesomeness: http://instagram.com/danmartell
Related Videos
- To Raise or Not To Raise Venture Capital https://www.youtube.com/watch?v=syfMR9Akxqo
- The 3 Secret Agreements You Make When Accepting Venture https://www.youtube.com/watch?v=syfMR9Akxqo
- StartupBalance With Kids https://www.youtube.com/watch?v=X2NsSWYs-20
Okay.
Due to popular demand, I’ve decided to finally tackle the billion dollar beast.
And while it’s not easy to have a conversation about startup equity without putting the faint of heart to sleep, it’s territory that simply can’t be overlooked.
Because for any growth-oriented entrepreneur entertaining the idea of handing out equity in their company, the math absolutely matters…
And one small misstep can be the difference between accelerated growth or the speed pass to startup hell.
So if you’ve ever wondered what a healthy equity breakdown looks like for all key stakeholders (founders, advisors, investors and team members)...
… then give this new video a quick spin.
As you can see, used appropriately, equity can be an amazing way to incentivize team members and attract key advisors and investors.
Like I did with Uber’s Travis Kalanick
But if you don’t enter the conversation with clear knowledge of the right benchmarks to shoot for…
… then you’re setting yourself up to either give too much away or lose talent and investors to other startups playing a much sharper numbers game.
So get your numbers right.
Make the right offers.
And then step up to the plate and use equity for the growth accelerant it is.
To splitting the pie…
(and watching it grow),
– Dan
Don't forget to share this entrepreneurial advice with your friends, so they can learn too: https://youtu.be/hWA1b8owinc
=====================
ABOUT DAN MARTELL
=====================
“You can only keep what you give away.” That’s the mantra that’s shaped Dan Martell from a struggling 20-something business owner in the Canadian Maritimes (which is waaay out east) to a successful startup founder who’s raised more than $3 million in venture funding and exited not one... not two... but three tech businesses: Clarity.fm, Spheric and Flowtown.
You can only keep what you give away. That philosophy has led Dan to invest in 33+ early stage startups such as Udemy, Intercom, Unbounce and Foodspotting. It’s also helped him shape the future of Hootsuite as an advisor to the social media tour de force.
An activator, a tech geek, an adrenaline junkie and, yes, a romantic (ask his wife Renee), Dan has recently turned his attention to teaching startups a fundamental, little-discussed lesson that directly impacts their growth: how to scale. You’ll find not only incredible insights in every moment of every talk Dan gives - but also highly actionable takeaways that will propel your business forward. Because Dan gives freely of all that he knows. After all, you can only keep what you give away.
Get free training videos, invites to private events, and cutting edge business strategies:
http://www.danmartell.com/newsletter

published:11 Jan 2016

views:29561

back

Aswath Damodaran: "Valuation: Four Lessons to Take Away" | Talks at Google

The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this t...

The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this talk, I propose to lay out four simple propositions about valuation. The first is that valuation is not an extension of accounting, insofar as it is not about recording the past but forecasting the future. The second is that valuation is not just modeling, where people put numbers into Excel spreadsheets and pump out values. A good valuation requires a narrative that binds the numbers together. The third is that valuing an asset or business is very different from pricing that asset or business, a difference that is often blurred in practice. The fourth is that luck plays a disproportionate role in whether you make money off your valuations. Put differently, you can do everything right and still walk away with nothing or worse at the end.
About the Author
I view myself, first and foremost, as a teacher. I do teach valuation and corporate finance not only to MBAs at Stern but to anyone who will listen (on iTunes U, online and on YouTube). I love to write books, teaching material and blog posts. After 30 years of teaching finance, I still find it fascinating as an interplay of economics, psychology and number crunching.

The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this talk, I propose to lay out four simple propositions about valuation. The first is that valuation is not an extension of accounting, insofar as it is not about recording the past but forecasting the future. The second is that valuation is not just modeling, where people put numbers into Excel spreadsheets and pump out values. A good valuation requires a narrative that binds the numbers together. The third is that valuing an asset or business is very different from pricing that asset or business, a difference that is often blurred in practice. The fourth is that luck plays a disproportionate role in whether you make money off your valuations. Put differently, you can do everything right and still walk away with nothing or worse at the end.
About the Author
I view myself, first and foremost, as a teacher. I do teach valuation and corporate finance not only to MBAs at Stern but to anyone who will listen (on iTunes U, online and on YouTube). I love to write books, teaching material and blog posts. After 30 years of teaching finance, I still find it fascinating as an interplay of economics, psychology and number crunching.

IPO Valuation Model

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you about the company and its possible valuation multiples before and after going public.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
4:17 The Rationale and Assumptions Behind an IPO
7:47 Pricing vs. Trading Equity Value in an IPO
12:38 Primary vs. Secondary Shares and the Greenshoe or Overallotment Provision
16:10 Deal Size & Net Proceeds to Issuer
19:31 Implied ValuationMultiples
21:08 Alternate IPO ModelDriven by Offering Price per Share and Shares Sold/Issued
24:05 Recap and Summary
Lesson Outline:
We get a lot of questions a...

published: 17 Mar 2015

Aswath Damodaran: "Valuation: Four Lessons to Take Away" | Talks at Google

The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this talk, I propose to lay out four simple propositions about valuation. The first is that valuation is not an extension of accounting, insofar as it is not about recording the past but forecasting the future. The second is that valuation is not just modeling, where people put numbers into Excel spreadsheets and pump out values. A good valuation requires a narrative that binds the numbers together. The third is that valuing an asset or business is very different from pricing that asset or business, a difference that is often blurred in practice. The fourth is that luck plays a disproportionate role in whether you make money off your valu...

published: 17 Feb 2015

Session 20: Valuing Private Business (for sale and IPO)

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuation for an IPO.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2Modtest.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession20.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20test.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20soln.pdf

published: 21 Apr 2015

Session 21: IPO and VC Valuation & First Steps on Real Options

In today's class, we put the finishing touches on private company valuation by looking at key questions that arise in private company valuation (illiquidity, key person etc.) and then looked at valuing IPOs. In particular, the question of what happens to the proceeds from an offering can affect value per share, and the offering price itself is subject to the dynamics of the issuance process, with investment bankers more likely to under price than over price offerings. In the second part of the class, I did a quick introduction to real options, setting up the intuitive rationale for real options. We covered the basics of options, starting with why real options are so attractive to analysts and investors: they allow you to add a premium to your DCF value. The two building blocks for real o...

published: 28 Nov 2016

Expense Synergies in Merger Models

In this expense synergies lesson, you'll learn why expense synergies matter, what they consist of, how they impact M&A deals.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
You'll also learn and accretion / dilution, and 3 common mistakes that people make when incorporating synergies into models.
Table of Contents:
3:45 Example of Expense Synergies (OfficeConsolidation)
7:57 Oversight #1: More Granular Estimates / Checks
11:37 Oversight #2: It Takes Time to Realize Synergies
14:39 Oversight #3: It TakesMoney to Realize Synergies
17:39 How DoesAll of ThisImpact the Deal, Accretion / (Dilution), and So On?
18:34 Recap and Summary
Why do Synergies matter? And what are they exactly?
Put simply, they're cases...

published: 07 Oct 2014

Session 14: More on the Dark Side (Emerging Market, Financial Service and Transition Companies)

In this session, we started with companies going through transitions before moving on to emerging market companies and financial service companies.
n this session, I first look at valuing entire markets and then at the process for valuing young companies.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/dcfvaltests3.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession14.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/session14Atest.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/session14Asoln.pdf

published: 31 Mar 2015

Interview with the NAGA Financial Director (NAGA Upcoming ICO)

Interviewing Wladimir Huber, Financial Director of NAGA , that is ongoing ICO.
We are looking to get as much information as possible about the NAGA ICO
About Naga: THE ONLY TOKEN SALE BY AN IPO’D FINTECH, UNITING THE FINANCIAL, CRYPTO, AND GAMING MARKETS.
Pre-Sale Sold: 18,500,000$
Tokens Available for sale: 220,000,000$
Advisors: Roger Ver; Mate Tokay; Miko Matsumura
For more info please, visit:
Web: https://goo.gl/mmBoZR
Questions would be asked from the community Chat as well
Please comment down, which ICO would you guys be interested in to cover in the future
Buy Trezor: https://shop.trezor.io?a=96c323ecc93c https://bitcoingold.org/downloads/
Thanks for watching.
Follow and Join us at:
Telegram: https://t.me/CCNChat
Facebook : https://www.facebook.com/CryptoCurrencyNetwor...

published: 28 Nov 2017

Ep 156: Stock Trading Webinar Q+A (Oct 2017)

Posted at: http://tradersfly.com/2017/10/ep-156-webinar-qa/
★ SUMMARY ★
In today’s live webinar class, I’m going to answer some of your questions in as much detail as possible, honestly and coming from all my trading experience and what I’ve done over the years.
Some of the questions we’ll answer are:
How easy or difficult is it to earn $1000 dollars trading stocks as a newbie with $2000 to invest?
This, of course, depends on your own personal strategies and risk levels, but generally speaking, it is really hard to make that amount of money with only $2000 investment, because it would mean a 50% return on your investment, which is huge and not something that most people are able to do.
What do you think about the Robin hood trading platform?
This is a very popular cell phone tradin...

published: 12 Oct 2017

Equity Crowdfunding Is It a Good Funding Option for Your Startup

There's a lot of buzz about crowdfunding these days, but is seeking money from the crowd the right path for your company? Do you know how it really works? And how can you increase your odds of building a successful campaign?
Before you give up a percentage of ownership in your company through equity crowdfunding, check out this presentation from Ventureneer (www.ventureneer.com) presented by EarlyGrowthFinancial Services (www.earlygrowthfinancialservices.com) for an in-depth look at:
- Crowdfinancing misconceptions
- What you need to know about Reg A+
- Reward-based crowdfunding vs equity crowdfunding
- How to run a successful equity crowdfunding campaign
- Preparing your company for crowdfunding
- Finding the best crowdfunding platform for your company
- And more...!

Ep 91: Evaluating Macroeconomic Conditions - Bulls vs Bears
★ SUMMARY ★
In this episode I’d like to go into evaluating market macroeconomics as well as looking at bulls vs. bears.
If you look at the market overall and we go into the weekly stand point, you can see that we’ve made all-time highs at this price level, so the SPY all-time highs here is right around the 2113 level, give or take.
If you look at the SPX, you’re looking right around the 2140 level, really it’s the all-time highs here is 2132 and then if we go into this bar here, 2134, so call it 2135.
What happens in these scenarios is, when you have a combination of shorts and longs, you’re able to take your positions off the table, and take your profits and allow the others to catch up. And then you get out of those shorts, ...

Original Upload:
https://www.youtube.com/watch?v=2HwFOo5rbZA&t=2s
"Peter Joseph is the founder of the Zeitgeist Movement, a grassroots, worldwide organization that advocates an alternative economic system based on sustainability, cooperation and human need. His most recent book, ‘The NewHuman RightsMovement,’ delivers a startling exposé about the violent oppression that defines our economic order, while issuing an urgent call for global activism to unite to replace it. Abby Martin sits down with Joseph to talk about the contradictions and crises of capitalism and what he advocates to save the future of the planet from catastrophe."
*
About TZM:
The Zeitgeist Movement is a global sustainability activist group working to bring the world together for the common goal of species sustainab...

IPO Valuation Model

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you ...

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you about the company and its possible valuation multiples before and after going public.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
4:17 The Rationale and Assumptions Behind an IPO
7:47 Pricing vs. Trading Equity Value in an IPO
12:38 Primary vs. Secondary Shares and the Greenshoe or Overallotment Provision
16:10 Deal Size & Net Proceeds to Issuer
19:31 Implied ValuationMultiples
21:08 Alternate IPO ModelDriven by Offering Price per Share and Shares Sold/Issued
24:05 Recap and Summary
Lesson Outline:
We get a lot of questions about "IPO valuation" or "IPO modeling," but the truth is that it’s really simple because you don't, in fact, "value" a company in an IPO.
Instead, you simply value a company and then decide how its valuation might be different in an IPO (e.g., no private company discount).
Step 1: Assumptions & Setup
You almost always start an IPO model with an idea of how much in funding the company wants to raise, and the multiples it may be valued at (based on public comps).
The multiples used vary by industry, but 1-year forward P / E multiples are very common (e.g., go to the next full fiscal year and assume a multiple for that projected full-year figure).
Here, we’d pick forward multiples from similar, profitable social networking / mobile messaging companies (not covered in this tutorial in the interest of time).
Amount of Capital to Raise: Very discretionary and it comes down to the company's plans, how many existing shareholders want to sell, whether it's PE or VC-backed, etc.
This is often set to 20-40% of a company's value; common to sell ~1/4 or ~1/3 of the company in a public offering, though that also varies.
Step 2: Trading vs. Pricing and the Pricing Discount
You apply the assumed multiple to the company's relevant metric, so ForwardNet Income in this case, which gets you the "Post-Money Equity Value @ Trading."
This is what the company's market cap should be after it has raised the capital and is trading on the stock market.
So we can then calculate the Post-Money Equity Value at Trading (the market rate) vs. Pricing (the discounted rate that institutional investors get).
And then calculate the Implied Offering Price per Share based on this - take this value, subtract the funds raised, and divide by the company's current share count.
Step 3: Determining the Primary vs. Secondary Shares and the "Greenshoe" (Overallotment) Provision
"Primary Shares" are newly created shares that represent actual capital being raised in the deal - this capital then goes to the company in the form of cash.
"Secondary Shares" represent existing investors selling their stakes to new investors (usually large institutions like Fidelity). No capital is raised here.
Formulas: Always determine the Primary Shares first, based on the Post-Money Equity Value @ Pricing and/or the amount of capital raised… and then figure out the Secondary Shares in relation to that.
Have to also figure out split between "Base Offering" and "Greenshoe" - "Greenshoe" is an option to issue even more shares if demand is strong enough. Used for cases where the company wants to keep the same offering price, but simply raise more capital if more investors are interested.
Very commonly set to ~15% in offerings in developed markets.
Step 4: Net Proceeds to Issuer
Look at Total Offering Size first (Primary + Secondary + Overallotment) and then subtract out fees.
Underwriting Discount: Banks used to, and sometimes still do, buy a portion of the company's stock as "insurance" in case the company can't sell it to anyone else… so this is supposed to compensate them for the risk of holding the stock temporarily, in case it can't find any buyers.
Bigger deal = lower fee % in most cases.
% Company Sold: Based on Primary Proceeds and Post-Money Equity Value @ Pricing - how much the company sold of itself just before it started trading publicly.
Step 5: Valuation Multiples
We move from Equity Value to Enterprise Value as we normally do… but we must factor in the cash raised in the IPO now!
Equity Value implicitly reflects this cash, so it must be subtracted when calculating the new Enterprise Value.
Would have to compare these multiples to those of the public comps to decide whether or not they look reasonable.
RESOURCES:
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.xlsx
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.pdf

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you about the company and its possible valuation multiples before and after going public.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
4:17 The Rationale and Assumptions Behind an IPO
7:47 Pricing vs. Trading Equity Value in an IPO
12:38 Primary vs. Secondary Shares and the Greenshoe or Overallotment Provision
16:10 Deal Size & Net Proceeds to Issuer
19:31 Implied ValuationMultiples
21:08 Alternate IPO ModelDriven by Offering Price per Share and Shares Sold/Issued
24:05 Recap and Summary
Lesson Outline:
We get a lot of questions about "IPO valuation" or "IPO modeling," but the truth is that it’s really simple because you don't, in fact, "value" a company in an IPO.
Instead, you simply value a company and then decide how its valuation might be different in an IPO (e.g., no private company discount).
Step 1: Assumptions & Setup
You almost always start an IPO model with an idea of how much in funding the company wants to raise, and the multiples it may be valued at (based on public comps).
The multiples used vary by industry, but 1-year forward P / E multiples are very common (e.g., go to the next full fiscal year and assume a multiple for that projected full-year figure).
Here, we’d pick forward multiples from similar, profitable social networking / mobile messaging companies (not covered in this tutorial in the interest of time).
Amount of Capital to Raise: Very discretionary and it comes down to the company's plans, how many existing shareholders want to sell, whether it's PE or VC-backed, etc.
This is often set to 20-40% of a company's value; common to sell ~1/4 or ~1/3 of the company in a public offering, though that also varies.
Step 2: Trading vs. Pricing and the Pricing Discount
You apply the assumed multiple to the company's relevant metric, so ForwardNet Income in this case, which gets you the "Post-Money Equity Value @ Trading."
This is what the company's market cap should be after it has raised the capital and is trading on the stock market.
So we can then calculate the Post-Money Equity Value at Trading (the market rate) vs. Pricing (the discounted rate that institutional investors get).
And then calculate the Implied Offering Price per Share based on this - take this value, subtract the funds raised, and divide by the company's current share count.
Step 3: Determining the Primary vs. Secondary Shares and the "Greenshoe" (Overallotment) Provision
"Primary Shares" are newly created shares that represent actual capital being raised in the deal - this capital then goes to the company in the form of cash.
"Secondary Shares" represent existing investors selling their stakes to new investors (usually large institutions like Fidelity). No capital is raised here.
Formulas: Always determine the Primary Shares first, based on the Post-Money Equity Value @ Pricing and/or the amount of capital raised… and then figure out the Secondary Shares in relation to that.
Have to also figure out split between "Base Offering" and "Greenshoe" - "Greenshoe" is an option to issue even more shares if demand is strong enough. Used for cases where the company wants to keep the same offering price, but simply raise more capital if more investors are interested.
Very commonly set to ~15% in offerings in developed markets.
Step 4: Net Proceeds to Issuer
Look at Total Offering Size first (Primary + Secondary + Overallotment) and then subtract out fees.
Underwriting Discount: Banks used to, and sometimes still do, buy a portion of the company's stock as "insurance" in case the company can't sell it to anyone else… so this is supposed to compensate them for the risk of holding the stock temporarily, in case it can't find any buyers.
Bigger deal = lower fee % in most cases.
% Company Sold: Based on Primary Proceeds and Post-Money Equity Value @ Pricing - how much the company sold of itself just before it started trading publicly.
Step 5: Valuation Multiples
We move from Equity Value to Enterprise Value as we normally do… but we must factor in the cash raised in the IPO now!
Equity Value implicitly reflects this cash, so it must be subtracted when calculating the new Enterprise Value.
Would have to compare these multiples to those of the public comps to decide whether or not they look reasonable.
RESOURCES:
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.xlsx
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.pdf

published:17 Mar 2015

views:36764

back

Aswath Damodaran: "Valuation: Four Lessons to Take Away" | Talks at Google

The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this t...

The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this talk, I propose to lay out four simple propositions about valuation. The first is that valuation is not an extension of accounting, insofar as it is not about recording the past but forecasting the future. The second is that valuation is not just modeling, where people put numbers into Excel spreadsheets and pump out values. A good valuation requires a narrative that binds the numbers together. The third is that valuing an asset or business is very different from pricing that asset or business, a difference that is often blurred in practice. The fourth is that luck plays a disproportionate role in whether you make money off your valuations. Put differently, you can do everything right and still walk away with nothing or worse at the end.
About the Author
I view myself, first and foremost, as a teacher. I do teach valuation and corporate finance not only to MBAs at Stern but to anyone who will listen (on iTunes U, online and on YouTube). I love to write books, teaching material and blog posts. After 30 years of teaching finance, I still find it fascinating as an interplay of economics, psychology and number crunching.

The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this talk, I propose to lay out four simple propositions about valuation. The first is that valuation is not an extension of accounting, insofar as it is not about recording the past but forecasting the future. The second is that valuation is not just modeling, where people put numbers into Excel spreadsheets and pump out values. A good valuation requires a narrative that binds the numbers together. The third is that valuing an asset or business is very different from pricing that asset or business, a difference that is often blurred in practice. The fourth is that luck plays a disproportionate role in whether you make money off your valuations. Put differently, you can do everything right and still walk away with nothing or worse at the end.
About the Author
I view myself, first and foremost, as a teacher. I do teach valuation and corporate finance not only to MBAs at Stern but to anyone who will listen (on iTunes U, online and on YouTube). I love to write books, teaching material and blog posts. After 30 years of teaching finance, I still find it fascinating as an interplay of economics, psychology and number crunching.

Session 20: Valuing Private Business (for sale and IPO)

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuati...

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuation for an IPO.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2Modtest.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession20.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20test.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20soln.pdf

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuation for an IPO.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2Modtest.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession20.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20test.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20soln.pdf

Session 21: IPO and VC Valuation & First Steps on Real Options

In today's class, we put the finishing touches on private company valuation by looking at key questions that arise in private company valuation (illiquidity, ke...

In today's class, we put the finishing touches on private company valuation by looking at key questions that arise in private company valuation (illiquidity, key person etc.) and then looked at valuing IPOs. In particular, the question of what happens to the proceeds from an offering can affect value per share, and the offering price itself is subject to the dynamics of the issuance process, with investment bankers more likely to under price than over price offerings. In the second part of the class, I did a quick introduction to real options, setting up the intuitive rationale for real options. We covered the basics of options, starting with why real options are so attractive to analysts and investors: they allow you to add a premium to your DCF value. The two building blocks for real option value are learning (from what is going on around you or ongoing events) and adapting your behavior. There are three questions that underlie the use of real options. The first is recognizing when you are dealing with an option, with a payoff diagram being the give away. The second is looking for exclusivity which is what gives options value. The third is using an option pricing model, which is built on replication and arbitrage.
Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2test.pdf
Slides: Part 1: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession21A.pdf
Part 2: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession21B.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Atest.pdf
Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Asoln.pdf

In today's class, we put the finishing touches on private company valuation by looking at key questions that arise in private company valuation (illiquidity, key person etc.) and then looked at valuing IPOs. In particular, the question of what happens to the proceeds from an offering can affect value per share, and the offering price itself is subject to the dynamics of the issuance process, with investment bankers more likely to under price than over price offerings. In the second part of the class, I did a quick introduction to real options, setting up the intuitive rationale for real options. We covered the basics of options, starting with why real options are so attractive to analysts and investors: they allow you to add a premium to your DCF value. The two building blocks for real option value are learning (from what is going on around you or ongoing events) and adapting your behavior. There are three questions that underlie the use of real options. The first is recognizing when you are dealing with an option, with a payoff diagram being the give away. The second is looking for exclusivity which is what gives options value. The third is using an option pricing model, which is built on replication and arbitrage.
Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2test.pdf
Slides: Part 1: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession21A.pdf
Part 2: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession21B.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Atest.pdf
Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Asoln.pdf

Expense Synergies in Merger Models

In this expense synergies lesson, you'll learn why expense synergies matter, what they consist of, how they impact M&A deals.
By http://breakingintowallstreet.c...

In this expense synergies lesson, you'll learn why expense synergies matter, what they consist of, how they impact M&A deals.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
You'll also learn and accretion / dilution, and 3 common mistakes that people make when incorporating synergies into models.
Table of Contents:
3:45 Example of Expense Synergies (OfficeConsolidation)
7:57 Oversight #1: More Granular Estimates / Checks
11:37 Oversight #2: It Takes Time to Realize Synergies
14:39 Oversight #3: It TakesMoney to Realize Synergies
17:39 How DoesAll of ThisImpact the Deal, Accretion / (Dilution), and So On?
18:34 Recap and Summary
Why do Synergies matter? And what are they exactly?
Put simply, they're cases where 1 + 1 = 3 in mergers and acquisitions.
You combine 2 companies, and get MORE revenue than just the Buyer's revenue plus the Seller's revenue…or you get LESS in expenses than just the Buyer's expenses plus the Seller's expenses.
Revenue Synergies are tough to estimate and are very error-prone… but sometimes they matter and can be
calculated more precisely.
Expense Synergies are more grounded in reality, because you look at what both companies are spending and decide
what can be cut - at the very least, it's based on actual expenses incurred by both companies.
Synergies matter because some deals require synergies to look good on paper (i.e., be accretive).
And some deals are motivated primarily by synergies, such as this one with 2 very similar men's retailers merging.
BUT… a lot of people get it wrong in 3 main areas when it comes to expense synergies in merger models:
Oversight #1: More Granular Estimates / Checks
Lots of models - even very complex ones - will just say something like, "$100 million in synergies per year!"
This is NOT ideal.
It's better to break out the synergies by specific functional areas, if not by specific employee counts, building rents, anticipated discounts on inventory purchases, and so on.
In real life, as a banker, you don't really know enough to do this - need the input of both companies' CFOs and finance departments to make estimates.
Oversight #2: It Takes Time to Realize Synergies
No matter how evil the combined company is, it can't just take the "Death Star" approach and blow up entire divisions / buildings all at once… it takes time to realize synergies, even if you're simply laying off employees.
And something like consolidating buildings or inventory purchases / processes takes even more time.
Here: The company makes it easy in their investor presentation, since they give us the expected amounts that will be realized each year.
Oversight #3: It Takes Money to Realize Synergies
It's not just "free" to consolidate buildings or factories or shuffle people around… there are costs associated with all of that.
Often labeled "Restructuring Costs" or "Integration Costs" or similar names.
Could show up on the Income Statement or on the Cash Flow Statement or both… depends on the deal and
the type of expenses.
Here: The company makes it easy for us with its estimate of $100 million in Integration Costs "over the next 18 months" - so we allocate that over the first 2 years of the model.
How Does All of This Impact the Deal, Accretion / (Dilution), and So On?
If you factor in the time and money required, it always makes the deal less accretive or more dilutive… because it pushes the Combined Pre-Tax Income lower in earlier years due to:
a) Some percentage less than 100% of synergies will be there; and
b) CFS expenses will push down the company's debt repayment ability, thereby increasing interest expense from debt in the earlier years.
Extra Resources
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-05-Mens-Wearhouse-Jos-A-Bank-Deal-Investor-Presentation.pdf

In this expense synergies lesson, you'll learn why expense synergies matter, what they consist of, how they impact M&A deals.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
You'll also learn and accretion / dilution, and 3 common mistakes that people make when incorporating synergies into models.
Table of Contents:
3:45 Example of Expense Synergies (OfficeConsolidation)
7:57 Oversight #1: More Granular Estimates / Checks
11:37 Oversight #2: It Takes Time to Realize Synergies
14:39 Oversight #3: It TakesMoney to Realize Synergies
17:39 How DoesAll of ThisImpact the Deal, Accretion / (Dilution), and So On?
18:34 Recap and Summary
Why do Synergies matter? And what are they exactly?
Put simply, they're cases where 1 + 1 = 3 in mergers and acquisitions.
You combine 2 companies, and get MORE revenue than just the Buyer's revenue plus the Seller's revenue…or you get LESS in expenses than just the Buyer's expenses plus the Seller's expenses.
Revenue Synergies are tough to estimate and are very error-prone… but sometimes they matter and can be
calculated more precisely.
Expense Synergies are more grounded in reality, because you look at what both companies are spending and decide
what can be cut - at the very least, it's based on actual expenses incurred by both companies.
Synergies matter because some deals require synergies to look good on paper (i.e., be accretive).
And some deals are motivated primarily by synergies, such as this one with 2 very similar men's retailers merging.
BUT… a lot of people get it wrong in 3 main areas when it comes to expense synergies in merger models:
Oversight #1: More Granular Estimates / Checks
Lots of models - even very complex ones - will just say something like, "$100 million in synergies per year!"
This is NOT ideal.
It's better to break out the synergies by specific functional areas, if not by specific employee counts, building rents, anticipated discounts on inventory purchases, and so on.
In real life, as a banker, you don't really know enough to do this - need the input of both companies' CFOs and finance departments to make estimates.
Oversight #2: It Takes Time to Realize Synergies
No matter how evil the combined company is, it can't just take the "Death Star" approach and blow up entire divisions / buildings all at once… it takes time to realize synergies, even if you're simply laying off employees.
And something like consolidating buildings or inventory purchases / processes takes even more time.
Here: The company makes it easy in their investor presentation, since they give us the expected amounts that will be realized each year.
Oversight #3: It Takes Money to Realize Synergies
It's not just "free" to consolidate buildings or factories or shuffle people around… there are costs associated with all of that.
Often labeled "Restructuring Costs" or "Integration Costs" or similar names.
Could show up on the Income Statement or on the Cash Flow Statement or both… depends on the deal and
the type of expenses.
Here: The company makes it easy for us with its estimate of $100 million in Integration Costs "over the next 18 months" - so we allocate that over the first 2 years of the model.
How Does All of This Impact the Deal, Accretion / (Dilution), and So On?
If you factor in the time and money required, it always makes the deal less accretive or more dilutive… because it pushes the Combined Pre-Tax Income lower in earlier years due to:
a) Some percentage less than 100% of synergies will be there; and
b) CFS expenses will push down the company's debt repayment ability, thereby increasing interest expense from debt in the earlier years.
Extra Resources
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-05-Mens-Wearhouse-Jos-A-Bank-Deal-Investor-Presentation.pdf

published:07 Oct 2014

views:9087

back

Session 14: More on the Dark Side (Emerging Market, Financial Service and Transition Companies)

In this session, we started with companies going through transitions before moving on to emerging market companies and financial service companies.
n this sessi...

In this session, we started with companies going through transitions before moving on to emerging market companies and financial service companies.
n this session, I first look at valuing entire markets and then at the process for valuing young companies.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/dcfvaltests3.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession14.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/session14Atest.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/session14Asoln.pdf

In this session, we started with companies going through transitions before moving on to emerging market companies and financial service companies.
n this session, I first look at valuing entire markets and then at the process for valuing young companies.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/dcfvaltests3.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession14.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/session14Atest.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/session14Asoln.pdf

Interviewing Wladimir Huber, Financial Director of NAGA , that is ongoing ICO.
We are looking to get as much information as possible about the NAGA ICO
About Naga: THE ONLY TOKEN SALE BY AN IPO’D FINTECH, UNITING THE FINANCIAL, CRYPTO, AND GAMING MARKETS.
Pre-Sale Sold: 18,500,000$
Tokens Available for sale: 220,000,000$
Advisors: Roger Ver; Mate Tokay; Miko Matsumura
For more info please, visit:
Web: https://goo.gl/mmBoZR
Questions would be asked from the community Chat as well
Please comment down, which ICO would you guys be interested in to cover in the future
Buy Trezor: https://shop.trezor.io?a=96c323ecc93c https://bitcoingold.org/downloads/
Thanks for watching.
Follow and Join us at:
Telegram: https://t.me/CCNChat
Facebook : https://www.facebook.com/CryptoCurrencyNetwork1/
Twitter: https://twitter.com/NetworkCurrency
Instagram : https://www.instagram.com/cryptocurrencynetworkccn/
Web: https://bfgroup.io/
info@bfgroup.io

Interviewing Wladimir Huber, Financial Director of NAGA , that is ongoing ICO.
We are looking to get as much information as possible about the NAGA ICO
About Naga: THE ONLY TOKEN SALE BY AN IPO’D FINTECH, UNITING THE FINANCIAL, CRYPTO, AND GAMING MARKETS.
Pre-Sale Sold: 18,500,000$
Tokens Available for sale: 220,000,000$
Advisors: Roger Ver; Mate Tokay; Miko Matsumura
For more info please, visit:
Web: https://goo.gl/mmBoZR
Questions would be asked from the community Chat as well
Please comment down, which ICO would you guys be interested in to cover in the future
Buy Trezor: https://shop.trezor.io?a=96c323ecc93c https://bitcoingold.org/downloads/
Thanks for watching.
Follow and Join us at:
Telegram: https://t.me/CCNChat
Facebook : https://www.facebook.com/CryptoCurrencyNetwork1/
Twitter: https://twitter.com/NetworkCurrency
Instagram : https://www.instagram.com/cryptocurrencynetworkccn/
Web: https://bfgroup.io/
info@bfgroup.io

Ep 156: Stock Trading Webinar Q+A (Oct 2017)

Posted at: http://tradersfly.com/2017/10/ep-156-webinar-qa/
★ SUMMARY ★
In today’s live webinar class, I’m going to answer some of your questions in as much de...

Posted at: http://tradersfly.com/2017/10/ep-156-webinar-qa/
★ SUMMARY ★
In today’s live webinar class, I’m going to answer some of your questions in as much detail as possible, honestly and coming from all my trading experience and what I’ve done over the years.
Some of the questions we’ll answer are:
How easy or difficult is it to earn $1000 dollars trading stocks as a newbie with $2000 to invest?
This, of course, depends on your own personal strategies and risk levels, but generally speaking, it is really hard to make that amount of money with only $2000 investment, because it would mean a 50% return on your investment, which is huge and not something that most people are able to do.
What do you think about the Robin hood trading platform?
This is a very popular cell phone trading platform, because it allows you to trade stocks for free, without broker fees. However, there are some issues when it comes to this trading platform. First, I don’t like trading on a cellphone, another issues is that it doesn’t allows you to short any stocks, you can’t hedge either, and generally their fill rates are not the best, because they need to make money some way, so they pump up the fill rates, in order to make money on their back end.
What is back testing?
Back testing is looking at the history of the market, and seeing how a specific strategy would have worked at a specific point in the past, when it comes to your results, and that way find out if that strategy would have worked or wouldn’t have worked.
In this video, we are also going to look at overall market conditions. We’ll analyze some stocks, evaluate them and see how they’re doing, do some technical analysis on them, and we’ll look for patterns and trend lines in the charts.
★ REGISTER FOR A FREELIVECLASS ★
http://bit.ly/marketevents
★ GETTING STARTED RESOURCE FOR TRADERS ★
http://bit.ly/startstocksnow
* Please note: some of the items listed below could and may be affiliate links **
* Trading Software / Tools *
Scottrade: http://bit.ly/getscott
SureTrader http://bit.ly/getsuretrader
TC2000: http://bit.ly/gettc2000
TradeKing: http://bit.ly/gettradeking
TradeStation: http://bit.ly/getstation
★ SHARE THIS VIDEO ★
https://youtu.be/1252i29OSG8
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us!
FREE 15 DAY TRIAL TO THE CRITICAL CHARTS
- http://bit.ly/charts15
GET THE NEWSLETTER
- http://bit.ly/stocknewsletter
STOCK TRADING COURSES:
- http://tradersfly.com/courses/
STOCK TRADING BOOKS:
- http://tradersfly.com/books/
WEBSITES:
- http://rise2learn.com
- http://criticalcharts.com
- http://tradersfly.com
- http://backstageincome.com
- http://sashaevdakov.com
SOCIAL MEDIA:
- http://twitter.com/criticalcharts/
- http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
- TradersFly: http://bit.ly/tradersfly
- BackstageIncome: http://bit.ly/backstageincome

Posted at: http://tradersfly.com/2017/10/ep-156-webinar-qa/
★ SUMMARY ★
In today’s live webinar class, I’m going to answer some of your questions in as much detail as possible, honestly and coming from all my trading experience and what I’ve done over the years.
Some of the questions we’ll answer are:
How easy or difficult is it to earn $1000 dollars trading stocks as a newbie with $2000 to invest?
This, of course, depends on your own personal strategies and risk levels, but generally speaking, it is really hard to make that amount of money with only $2000 investment, because it would mean a 50% return on your investment, which is huge and not something that most people are able to do.
What do you think about the Robin hood trading platform?
This is a very popular cell phone trading platform, because it allows you to trade stocks for free, without broker fees. However, there are some issues when it comes to this trading platform. First, I don’t like trading on a cellphone, another issues is that it doesn’t allows you to short any stocks, you can’t hedge either, and generally their fill rates are not the best, because they need to make money some way, so they pump up the fill rates, in order to make money on their back end.
What is back testing?
Back testing is looking at the history of the market, and seeing how a specific strategy would have worked at a specific point in the past, when it comes to your results, and that way find out if that strategy would have worked or wouldn’t have worked.
In this video, we are also going to look at overall market conditions. We’ll analyze some stocks, evaluate them and see how they’re doing, do some technical analysis on them, and we’ll look for patterns and trend lines in the charts.
★ REGISTER FOR A FREELIVECLASS ★
http://bit.ly/marketevents
★ GETTING STARTED RESOURCE FOR TRADERS ★
http://bit.ly/startstocksnow
* Please note: some of the items listed below could and may be affiliate links **
* Trading Software / Tools *
Scottrade: http://bit.ly/getscott
SureTrader http://bit.ly/getsuretrader
TC2000: http://bit.ly/gettc2000
TradeKing: http://bit.ly/gettradeking
TradeStation: http://bit.ly/getstation
★ SHARE THIS VIDEO ★
https://youtu.be/1252i29OSG8
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us!
FREE 15 DAY TRIAL TO THE CRITICAL CHARTS
- http://bit.ly/charts15
GET THE NEWSLETTER
- http://bit.ly/stocknewsletter
STOCK TRADING COURSES:
- http://tradersfly.com/courses/
STOCK TRADING BOOKS:
- http://tradersfly.com/books/
WEBSITES:
- http://rise2learn.com
- http://criticalcharts.com
- http://tradersfly.com
- http://backstageincome.com
- http://sashaevdakov.com
SOCIAL MEDIA:
- http://twitter.com/criticalcharts/
- http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
- TradersFly: http://bit.ly/tradersfly
- BackstageIncome: http://bit.ly/backstageincome

Equity Crowdfunding Is It a Good Funding Option for Your Startup

There's a lot of buzz about crowdfunding these days, but is seeking money from the crowd the right path for your company? Do you know how it really works? And h...

There's a lot of buzz about crowdfunding these days, but is seeking money from the crowd the right path for your company? Do you know how it really works? And how can you increase your odds of building a successful campaign?
Before you give up a percentage of ownership in your company through equity crowdfunding, check out this presentation from Ventureneer (www.ventureneer.com) presented by EarlyGrowthFinancial Services (www.earlygrowthfinancialservices.com) for an in-depth look at:
- Crowdfinancing misconceptions
- What you need to know about Reg A+
- Reward-based crowdfunding vs equity crowdfunding
- How to run a successful equity crowdfunding campaign
- Preparing your company for crowdfunding
- Finding the best crowdfunding platform for your company
- And more...!

There's a lot of buzz about crowdfunding these days, but is seeking money from the crowd the right path for your company? Do you know how it really works? And how can you increase your odds of building a successful campaign?
Before you give up a percentage of ownership in your company through equity crowdfunding, check out this presentation from Ventureneer (www.ventureneer.com) presented by EarlyGrowthFinancial Services (www.earlygrowthfinancialservices.com) for an in-depth look at:
- Crowdfinancing misconceptions
- What you need to know about Reg A+
- Reward-based crowdfunding vs equity crowdfunding
- How to run a successful equity crowdfunding campaign
- Preparing your company for crowdfunding
- Finding the best crowdfunding platform for your company
- And more...!

Ep 91: Evaluating Macroeconomic Conditions - Bulls vs Bears
★ SUMMARY ★
In this episode I’d like to go into evaluating market macroeconomics as well as looking at bulls vs. bears.
If you look at the market overall and we go into the weekly stand point, you can see that we’ve made all-time highs at this price level, so the SPY all-time highs here is right around the 2113 level, give or take.
If you look at the SPX, you’re looking right around the 2140 level, really it’s the all-time highs here is 2132 and then if we go into this bar here, 2134, so call it 2135.
What happens in these scenarios is, when you have a combination of shorts and longs, you’re able to take your positions off the table, and take your profits and allow the others to catch up. And then you get out of those shorts, you take some profits and you flip and go into the long side.
Posted at: http://tradersfly.com/2016/06/ep-91-evaluating-macroeconomic-conditions-bulls-vs-bears/
★ SHARE THIS VIDEO ★
https://youtu.be/6kUCy1y_E7w
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us!
FREE 15 DAY TRIAL TO THE CRITICAL CHARTS
-- http://bit.ly/charts15
GET THE NEWSLETTER
-- http://bit.ly/stocknewsletter
STOCK TRADING COURSES:
-- http://tradersfly.com/courses/
STOCK TRADING BOOKS:
-- http://tradersfly.com/books/
WEBSITES:
-- http://rise2learn.com
-- http://criticalcharts.com
-- http://investinghelpdesk.com
-- http://tradersfly.com
-- http://backstageincome.com
-- http://sashaevdakov.com
SOCIAL MEDIA:
-- http://twitter.com/criticalcharts/
-- http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
-- TradersFly: http://bit.ly/tradersfly
-- BackstageIncome: http://bit.ly/backstageincomeome

Ep 91: Evaluating Macroeconomic Conditions - Bulls vs Bears
★ SUMMARY ★
In this episode I’d like to go into evaluating market macroeconomics as well as looking at bulls vs. bears.
If you look at the market overall and we go into the weekly stand point, you can see that we’ve made all-time highs at this price level, so the SPY all-time highs here is right around the 2113 level, give or take.
If you look at the SPX, you’re looking right around the 2140 level, really it’s the all-time highs here is 2132 and then if we go into this bar here, 2134, so call it 2135.
What happens in these scenarios is, when you have a combination of shorts and longs, you’re able to take your positions off the table, and take your profits and allow the others to catch up. And then you get out of those shorts, you take some profits and you flip and go into the long side.
Posted at: http://tradersfly.com/2016/06/ep-91-evaluating-macroeconomic-conditions-bulls-vs-bears/
★ SHARE THIS VIDEO ★
https://youtu.be/6kUCy1y_E7w
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us!
FREE 15 DAY TRIAL TO THE CRITICAL CHARTS
-- http://bit.ly/charts15
GET THE NEWSLETTER
-- http://bit.ly/stocknewsletter
STOCK TRADING COURSES:
-- http://tradersfly.com/courses/
STOCK TRADING BOOKS:
-- http://tradersfly.com/books/
WEBSITES:
-- http://rise2learn.com
-- http://criticalcharts.com
-- http://investinghelpdesk.com
-- http://tradersfly.com
-- http://backstageincome.com
-- http://sashaevdakov.com
SOCIAL MEDIA:
-- http://twitter.com/criticalcharts/
-- http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
-- TradersFly: http://bit.ly/tradersfly
-- BackstageIncome: http://bit.ly/backstageincomeome

ReadPost Here: https://www.warriortrading.com/3-lessons-making-60k-1-month-behind-trades-ep-4/
FREE eBook: "How to Day Trade" | Download Now: http://webinar.warriortrading.com/signup
DISCLAIMER: http://www.warriortrading.com/disclaimer/
//
Join our FreeDay TradingChat Room here: https://www.warriortrading.com/free-day-trading-chat-room/
See our LiveStreamingChannel on TickerTV here: https://ticker.tv/daytradewarrior/
I teach Day Trading Strategies for BeginnerTraders. I focus on Momentum Trading Strategies including Gap and GO! and Trend Finding Strategies. All of our classes are available for immediate streaming at https://www.WarriorTrading.com.
// Helpful Links
Day Trading Chat Room: https://www.warriortrading.com/day-trading-chat-room/
Premium Trading Courses: https://www.warriortrading.com/trading-courses/
Gap and Go Trading Strategy: https://www.warriortrading.com/gap-go/
Momentum Trading Strategy: https://www.warriortrading.com/momentum-day-trading-strategy/
Reversal Trading Strategy: https://www.warriortrading.com/reversal-trading-strategy/
ContactInfo: https://www.warriortrading.com/contact/
Twitter: @Daytrade Warrior @swingwarrior
“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime”…
// Learn How to Day Trade and Learn How to Swing Trading
As Day Traders and Swing Traders our mission is simple. We are looking for stocks that we expect will move in a predictable direction. We want to take a position with a predefined stop level and profit target. Sounds easy right? In a lot of ways it is. But there are literally thousands of different strategies for trading the market. Every trader has a unique approach to trading. Our goal is to teach you our strategies. I have developed a series of profitable trading strategies for beginners. Our Trading Courses focus on the most fundamental aspects of a successful trade.
// ChartPatterns
After you understand risk management and proper stock selection, we teach you how to find stock patterns on charts. These patterns are how we base our risk and reward. We look for chart patterns that have well defined areas of support and resistance. We will use previous support levels as our stop price, or our risk, and we look at previous resistance areas as our initial profit target, or our reward. If the profit vs loss ratio is 2:1 we will take the trade. I teach both day trading strategies and swing trading strategies. For day trading we focus primarily on 5min charts while swing traders focus more on daily charts. The patterns in general are the same. I teach traders how to find patterns in real-time including BullFlags, Bear Flags, FlatTops, Flat Bottoms, and Rubber Band Reversal Setups.
// Trading Strategies
Learning risk management, proper stock selection, and chart patterns is important, but those alone don’t create a trading strategy. A trading strategy requires details on the time of day you take these trades, what type of stocks you like to trade, what percentage to success you expect. All our students are required to papertrade and prove to me that they can trade on a percentage of success that is high enough to justify real trading. If you can’t make money in a demo account, you have no business trading a real account. We have saved students hundreds of thousands of dollars by encouraging paper trading while they are learning. The market will be here for a long time to come. The important thing for you right now is to build up the skills to trade the market successfully. You will learn that once you possess the skills to consistently make $20.00/day all it takes to make $200 is larger share size. Then all it takes to make $2000 is again, larger share size. The hardest part is being consistently green just $20/day. So that is our initial target for all of our students. Profitable trading 4/5 days per week for at least 3 months.
Join our Free Day Trading Chat Room here: https://www.warriortrading.com/free-day-trading-chat-room/

ReadPost Here: https://www.warriortrading.com/3-lessons-making-60k-1-month-behind-trades-ep-4/
FREE eBook: "How to Day Trade" | Download Now: http://webinar.warriortrading.com/signup
DISCLAIMER: http://www.warriortrading.com/disclaimer/
//
Join our FreeDay TradingChat Room here: https://www.warriortrading.com/free-day-trading-chat-room/
See our LiveStreamingChannel on TickerTV here: https://ticker.tv/daytradewarrior/
I teach Day Trading Strategies for BeginnerTraders. I focus on Momentum Trading Strategies including Gap and GO! and Trend Finding Strategies. All of our classes are available for immediate streaming at https://www.WarriorTrading.com.
// Helpful Links
Day Trading Chat Room: https://www.warriortrading.com/day-trading-chat-room/
Premium Trading Courses: https://www.warriortrading.com/trading-courses/
Gap and Go Trading Strategy: https://www.warriortrading.com/gap-go/
Momentum Trading Strategy: https://www.warriortrading.com/momentum-day-trading-strategy/
Reversal Trading Strategy: https://www.warriortrading.com/reversal-trading-strategy/
ContactInfo: https://www.warriortrading.com/contact/
Twitter: @Daytrade Warrior @swingwarrior
“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime”…
// Learn How to Day Trade and Learn How to Swing Trading
As Day Traders and Swing Traders our mission is simple. We are looking for stocks that we expect will move in a predictable direction. We want to take a position with a predefined stop level and profit target. Sounds easy right? In a lot of ways it is. But there are literally thousands of different strategies for trading the market. Every trader has a unique approach to trading. Our goal is to teach you our strategies. I have developed a series of profitable trading strategies for beginners. Our Trading Courses focus on the most fundamental aspects of a successful trade.
// ChartPatterns
After you understand risk management and proper stock selection, we teach you how to find stock patterns on charts. These patterns are how we base our risk and reward. We look for chart patterns that have well defined areas of support and resistance. We will use previous support levels as our stop price, or our risk, and we look at previous resistance areas as our initial profit target, or our reward. If the profit vs loss ratio is 2:1 we will take the trade. I teach both day trading strategies and swing trading strategies. For day trading we focus primarily on 5min charts while swing traders focus more on daily charts. The patterns in general are the same. I teach traders how to find patterns in real-time including BullFlags, Bear Flags, FlatTops, Flat Bottoms, and Rubber Band Reversal Setups.
// Trading Strategies
Learning risk management, proper stock selection, and chart patterns is important, but those alone don’t create a trading strategy. A trading strategy requires details on the time of day you take these trades, what type of stocks you like to trade, what percentage to success you expect. All our students are required to papertrade and prove to me that they can trade on a percentage of success that is high enough to justify real trading. If you can’t make money in a demo account, you have no business trading a real account. We have saved students hundreds of thousands of dollars by encouraging paper trading while they are learning. The market will be here for a long time to come. The important thing for you right now is to build up the skills to trade the market successfully. You will learn that once you possess the skills to consistently make $20.00/day all it takes to make $200 is larger share size. Then all it takes to make $2000 is again, larger share size. The hardest part is being consistently green just $20/day. So that is our initial target for all of our students. Profitable trading 4/5 days per week for at least 3 months.
Join our Free Day Trading Chat Room here: https://www.warriortrading.com/free-day-trading-chat-room/

Original Upload:
https://www.youtube.com/watch?v=2HwFOo5rbZA&t=2s
"Peter Joseph is the founder of the Zeitgeist Movement, a grassroots, worldwide organization that advocates an alternative economic system based on sustainability, cooperation and human need. His most recent book, ‘The NewHuman RightsMovement,’ delivers a startling exposé about the violent oppression that defines our economic order, while issuing an urgent call for global activism to unite to replace it. Abby Martin sits down with Joseph to talk about the contradictions and crises of capitalism and what he advocates to save the future of the planet from catastrophe."
*
About TZM:
The Zeitgeist Movement is a global sustainability activist group working to bring the world together for the common goal of species sustainability before it is too late. Divisive notions such as nations, governments, races, political parties, religions, creeds or class are non-operational distinctions in the view of The Movement. Rather, we recognize the world as one system and the human species as a singular unit, sharing a common habitat.
------------------------------------------------------------------------------------------------
LIKE The Zeitgeist Movement @ https://www.facebook.com/tzmglobal
FOLLOW The Zeitgeist Movement @ https://twitter.com/tzmglobal
JOIN THE MAILING LIST: http://www.thezeitgeistmovement.com/
SUBSCRIBE TO THIS CHANNEL: https://www.youtube.com/channel/UCEwoFdqY09VwZFESGZ8Qp4A?sub_confirmation=1

Original Upload:
https://www.youtube.com/watch?v=2HwFOo5rbZA&t=2s
"Peter Joseph is the founder of the Zeitgeist Movement, a grassroots, worldwide organization that advocates an alternative economic system based on sustainability, cooperation and human need. His most recent book, ‘The NewHuman RightsMovement,’ delivers a startling exposé about the violent oppression that defines our economic order, while issuing an urgent call for global activism to unite to replace it. Abby Martin sits down with Joseph to talk about the contradictions and crises of capitalism and what he advocates to save the future of the planet from catastrophe."
*
About TZM:
The Zeitgeist Movement is a global sustainability activist group working to bring the world together for the common goal of species sustainability before it is too late. Divisive notions such as nations, governments, races, political parties, religions, creeds or class are non-operational distinctions in the view of The Movement. Rather, we recognize the world as one system and the human species as a singular unit, sharing a common habitat.
------------------------------------------------------------------------------------------------
LIKE The Zeitgeist Movement @ https://www.facebook.com/tzmglobal
FOLLOW The Zeitgeist Movement @ https://twitter.com/tzmglobal
JOIN THE MAILING LIST: http://www.thezeitgeistmovement.com/
SUBSCRIBE TO THIS CHANNEL: https://www.youtube.com/channel/UCEwoFdqY09VwZFESGZ8Qp4A?sub_confirmation=1

Startup Funding Explained: Everything You Need to Know

The Rest Of Us on Patreon:
https://www.patreon.com/TheRestOfUs
The Rest Of Us on Twitter:
http://twitter.com/TROUchannel
The Rest Of Us T-Shirts and More:
http://teespring.com/TheRestOfUsClothing
Part 2:
https://www.youtube.com/watch?v=fcjmVj5fM5k
Credits:
Music by The FatRat.
https://www.youtube.com/channel/UCa_UMppcMsHIzb5LDx1u9zQ
If you're a YouTuber, definitely check The FatRat. The channel offers a wide variety of free-to-use music for your videos.

25:45

IPO Valuation Model

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initi...

IPO Valuation Model

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you about the company and its possible valuation multiples before and after going public.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
4:17 The Rationale and Assumptions Behind an IPO
7:47 Pricing vs. Trading Equity Value in an IPO
12:38 Primary vs. Secondary Shares and the Greenshoe or Overallotment Provision
16:10 Deal Size & Net Proceeds to Issuer
19:31 Implied ValuationMultiples
21:08 Alternate IPO ModelDriven by Offering Price per Share and Shares Sold/Issued
24:05 Recap and Summary
Lesson Outline:
We get a lot of questions about "IPO valuation" or "IPO modeling," but the truth is that it’s really simple because you don't, in fact, "value" a company in an IPO.
Instead, you simply value a company and then decide how its valuation might be different in an IPO (e.g., no private company discount).
Step 1: Assumptions & Setup
You almost always start an IPO model with an idea of how much in funding the company wants to raise, and the multiples it may be valued at (based on public comps).
The multiples used vary by industry, but 1-year forward P / E multiples are very common (e.g., go to the next full fiscal year and assume a multiple for that projected full-year figure).
Here, we’d pick forward multiples from similar, profitable social networking / mobile messaging companies (not covered in this tutorial in the interest of time).
Amount of Capital to Raise: Very discretionary and it comes down to the company's plans, how many existing shareholders want to sell, whether it's PE or VC-backed, etc.
This is often set to 20-40% of a company's value; common to sell ~1/4 or ~1/3 of the company in a public offering, though that also varies.
Step 2: Trading vs. Pricing and the Pricing Discount
You apply the assumed multiple to the company's relevant metric, so ForwardNet Income in this case, which gets you the "Post-Money Equity Value @ Trading."
This is what the company's market cap should be after it has raised the capital and is trading on the stock market.
So we can then calculate the Post-Money Equity Value at Trading (the market rate) vs. Pricing (the discounted rate that institutional investors get).
And then calculate the Implied Offering Price per Share based on this - take this value, subtract the funds raised, and divide by the company's current share count.
Step 3: Determining the Primary vs. Secondary Shares and the "Greenshoe" (Overallotment) Provision
"Primary Shares" are newly created shares that represent actual capital being raised in the deal - this capital then goes to the company in the form of cash.
"Secondary Shares" represent existing investors selling their stakes to new investors (usually large institutions like Fidelity). No capital is raised here.
Formulas: Always determine the Primary Shares first, based on the Post-Money Equity Value @ Pricing and/or the amount of capital raised… and then figure out the Secondary Shares in relation to that.
Have to also figure out split between "Base Offering" and "Greenshoe" - "Greenshoe" is an option to issue even more shares if demand is strong enough. Used for cases where the company wants to keep the same offering price, but simply raise more capital if more investors are interested.
Very commonly set to ~15% in offerings in developed markets.
Step 4: Net Proceeds to Issuer
Look at Total Offering Size first (Primary + Secondary + Overallotment) and then subtract out fees.
Underwriting Discount: Banks used to, and sometimes still do, buy a portion of the company's stock as "insurance" in case the company can't sell it to anyone else… so this is supposed to compensate them for the risk of holding the stock temporarily, in case it can't find any buyers.
Bigger deal = lower fee % in most cases.
% Company Sold: Based on Primary Proceeds and Post-Money Equity Value @ Pricing - how much the company sold of itself just before it started trading publicly.
Step 5: Valuation Multiples
We move from Equity Value to Enterprise Value as we normally do… but we must factor in the cash raised in the IPO now!
Equity Value implicitly reflects this cash, so it must be subtracted when calculating the new Enterprise Value.
Would have to compare these multiples to those of the public comps to decide whether or not they look reasonable.
RESOURCES:
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.xlsx
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.pdf

Raising money from an angel investor. Pre-money and post-money valuation. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/getting-a-seed-round-from-a-vc?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/ebitda?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks through starting, financing and taking public a company (and even talks about what happens if it has trouble paying its debts).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

14:30

An IPO | Stocks and bonds | Finance & Capital Markets | Khan Academy

The initial public offering of our online sock company. Created by Sal Khan.
Watch the ne...

An IPO | Stocks and bonds | Finance & Capital Markets | Khan Academy

The initial public offering of our online sock company. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/more-on-ipos?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/going-back-to-the-till-series-b?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks through starting, financing and taking public a company (and even talks about what happens if it has trouble paying its debts).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Mechanics of a share-based acquisition. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/mergers-acquisitions/v/price-behavior-after-announced-acquisition?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/dilution-tutorial/v/stock-dilution?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: Companies often buy or merge with other companies using shares (which is sometimes less intuitive than when they use cash). This tutorial walks through the mechanics of how this happens and details what is likely to happen in the public markets because of the transaction (including opportunities for arbitrage).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

4:59

IPO Basics: What is an IPO (Initial Public Offering) Definition

Do your research before investing in IPO stocks to avoid getting in at the wrong time.
IP...

IPO Basics: What is an IPO (Initial Public Offering) Definition

Do your research before investing in IPO stocks to avoid getting in at the wrong time.
IPO (Initial Public Offering)
-The first time the stock is released to the public and is available for purchase
The Problem With IPOs:
-The stock market is based on future expected growth
-IPOs need time to set up
-Preferred shareholders typically sell their shares as soon as the IPO comes out, which causes the stock to go down
-Sometimes preferred shareholders are required to hold their shares for 60-90 days, the stock can decrease at this time instead of dropping initially.
-As time go on, more shareholders can sell their stock. You need to read the find print to find out when this happens.
-Let the charts set up, give them time and do not hurry
-Don't jump into things too quickly, IPOs should be avoided initially
-Understand why you are buying the stock. Don't just purchase it because it's a company you use (e.g. Zynga or Groupon)
-A better time to get in is after the stock has decreased over a period of time and begins to go back up. You don't need to get in right away.
Example:
-Facebook (FB)
-Everyone expected FB to go way up, but it went very low because preferred shareholders sold their shares right away
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us!
STOCK TRADING COURSES:
-- http://tradersfly.com/courses/
STOCK TRADING BOOKS:
-- http://tradersfly.com/books/
WEBSITES:
-- http://rise2learn.com
-- http://criticalcharts.com
-- http://investinghelpdesk.com
-- http://tradersfly.com
-- http://backstageincome.com
-- http://sashaevdakov.com
SOCIAL MEDIA:
-- http://twitter.com/criticalcharts/
-- http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
-- TradersFly: http://bit.ly/tradersfly
-- BackstageIncome: http://bit.ly/backstageincome

4:06

SEC Cracks Down on Pre-IPO Trading

Federal regulators are cracking down on an obscure but booming market for trading shares i...

Session 20: Valuing Private Business (for sale and IPO)

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuation for an IPO.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2Modtest.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession20.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20test.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20soln.pdf

3:34

How The Stock Exchange Works (For Dummies)

Why are there stocks at all?
Everyday in the news we hear about the stock exchange, stock...

How The Stock Exchange Works (For Dummies)

Why are there stocks at all?
Everyday in the news we hear about the stock exchange, stocks and money moving around the globe. Still, a lot of people don't have an idea why we have stock markets at all, because the topic is usually very dry. We made a short video about the basics of the stock exchanges. With robots. Robots are kewl!
Short videos, explaining things. For example Evolution, the Universe, the Stock Market or controversial topics like Fracking. Because we love science.
We would love to interact more with you, our viewers to figure out what topics you want to see. If you have a suggestion for future videos or feedback, drop us a line! :)
We're a bunch of Information designers from munich, visit us on facebook or behance to say hi!
https://www.facebook.com/Kurzgesagt
https://www.behance.net/kurzgesagt
How the Stock Exchange works
Help us caption & translate this video!
http://www.youtube.com/timedtext_cs_panel?c=UCsXVk37bltHxD1rDPwtNM8Q&tab=2

14:11

Startup Valuation - How Are Startups Worth Billions?

You’ll learn about Startup Valuation in this lesson, and see how a traditional methodology...

Startup Valuation - How Are Startups Worth Billions?

You’ll learn about StartupValuation in this lesson, and see how a traditional methodology such as the Discounted Cash Flow (DCF) analysis applies to early-stage tech startups with no revenue.
http://breakingintowallstreet.com/
"Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
2:59 A DCF Analysis for Piped Piper
9:01 What’s Required for a Startup DCF/Valuation to Work
12:35 Recap and Summary
How Are Startups WorthBillions of Dollars?
“I don’t understand how tech startups can be worth billions of dollars – many of them aren’t even making money yet!”
“How can an unprofitable company that isn’t even generating revenue possibly be worth so much? Doesn’t this violate all the principles of valuation?”
We get questions like the ones above all the time. The short answer is NO, startup valuation doesn’t violate all the principles.
You can still use standard methodologies such as the DCF, but you have to use radically different assumptions that make the analysis less grounded in reality.
For the numbers to work, the startup has to start making A LOT of money very quickly in the NEAR FUTURE.
If it takes 10-15 years to generate revenue, it will be almost impossible for the numbers to work; but if it happens in the next 2-3 years, it might be plausible.
As an example, we look at Pied Piper in this lesson, the fictional company from the HBO show “Silicon Valley.”
They make money with a file compression and storage app, and they’re aiming to get hundreds of millions of users and then get a tiny percentage of them using their paid services.
So if they currently generate no revenue and have just received $100 million in funding at a $1 billion valuation, is that crazy?
A DCF for Pied Piper
We assume massive app download growth in the early years, with the company reaching ~500 million annual downloads and ~150 million paid users by the end of Year 10. Revenue goes from 0 to nearly $2 billion over that time frame.
The company goes from negative Operating Income to nearly $500 million (25% margin) and almost $300 million in FreeCash Flow.
We use a 100xEBITDA multiple to calculate the Terminal Value (arguably fair for a $2 billion company growing at nearly 40% per year).
These assumptions are highly speculative, and so we also have to use a much higher Discount Rate: 50%, compared with the standard 8-12% figures you see for mature companies.
As a result of all this, far more value comes from the Present Value of the Terminal Value: 99% here, vs. 50-70% for normal companies (and ideally less than that!).
The whole valuation is dependent on a huge number of assumptions that are impossible to know in advance: Will billions of people download the app? Will ~5% of users convert to paying customers? Will the company be able to monetize in only 2-3 years’ time?
These assumptions might turn out to be true, but there’s a very high chance they might not be – which explains the 50% Discount Rate.
Startup Valuation Myths
So the DCF does “work” for startups; it’s just not that useful because of all the required assumptions and the inability to guesstimate the numbers for a pre-revenue company.
For a valuation to make sense, the company has to start generating money *very quickly* – if it takes ten years for that to happen, the numbers will be even harder to justify.
And since the majority of the implied value comes from the Terminal Value, the Terminal Multiple and Terminal Growth Rate are incredibly important. They matter more than long-term profit margins because almost no value comes from the Present Value of Free Cash Flows.
RESOURCES:
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-17-How-Are-Startups-Worth-Billions-Slides.pdf
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-17-How-Are-Startups-Worth-Billions.xlsx

17:56

WACC, Cost of Equity, and Cost of Debt in a DCF

In this WACC and Cost of Equity tutorial, you'll learn how changes to assumptions in a DCF...

WACC, Cost of Equity, and Cost of Debt in a DCF

In this WACC and Cost of Equity tutorial, you'll learn how changes to assumptions in a DCF impact variables like the Cost of Equity, Cost of Debt.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
You'll also learn about WACC (Weighted Average Cost of Capital) - and why it is not always so straightforward to answer these questions in interviews.
Table of Contents:
2:22 Why Everything is Interrelated
4:22 Summary of Factors That Impact a DCF
6:37 Changes to Debt Percentages in the Capital Structure
11:38 The Risk-Free Rate, Equity Risk Premium, and Beta
12:49 The Tax Rate
14:55 Recap and Summary
Why Do WACC, the Cost of Equity, and the Cost of Debt Matter?
This is a VERY common interview question:
"If a company goes from 10% debt to 30% debt, does its WACC increase or decrease?"
"What if the Risk-Free Rate changes? How is everything else impacted?"
"What if the company is bigger / smaller?"
Plus, you need to use these concepts on the job all the time when valuing companies… these "costs" represent your
opportunity cost from investing in a specific company, and you use them to evaluate that company's cash flows and determine
how much the company is worth to you.
EX: If you can get a 10% yield by investing in other, similar companies in this market, you'd evaluate this company's cash flows against that 10% "discount rate"…
…and if this company's debt, tax rate, or overall size changes, you better know how the discount rate also changes! It could easily change the company's value to you, the investor.
The Most Important Concept…
Everything is interrelated - in other words, more debt will impact BOTH the equity AND the debt investors!
Why?
Because additional leverage makes the company riskier for everyone involved. The chance of bankruptcy is higher, so the "cost" even to the equity investors increases.
AND: Other variables like the Risk-Free Rate will end up impacting everything, including Cost of Equity and Cost of Debt, because both of them are tied to overall interest rates on "safe" government bonds.
Tricky: Some changes only make an impact when a company actually has debt (changes to the tax rate), and you can't always predict how the value derived from a DCF will change in response to this.
Changes to the DCF Analysis and the Impact on Cost of Equity, Cost of Debt, WACC, and Implied Value:
SmallerCompany:
Cost of Debt, Equity, and WACC are all higher.
Bigger Company:
Cost of Debt, Equity, and WACC are all lower.
* Assuming the same capital structure percentages - if the capital structure is NOT the same, this could go either way.
EmergingMarket:
Cost of Debt, Equity, and WACC are all higher.
No Debt to Some Debt:
Cost of Equity and Cost of Debt are higher. WACC is lower at first, but eventually higher.
Some Debt to No Debt:
Cost of Equity and Cost of Debt are lower. It's impossible to say how WACC changes because it depends on where you are in the "U-shaped curve" - if you're above the debt % that minimizes WACC, WACC will decrease.
Otherwise, if you're at that minimum or below it, WACC will increase.
Higher Risk-Free Rate:
Cost of Equity, Debt, and WACC are all higher; they're all lower with a lower Risk-Free Rate.
Higher Equity Risk Premium and Higher Beta:
Cost of Equity is higher, and so is WACC; Cost of Debt doesn't change in a predictable way in response to these.
When these are lower, Cost of Equity and WACC are both lower.
Higher Tax Rate:
Cost of Equity, Debt, and WACC are all lower; they're higher when the tax rate is lower.
** Assumes the company has debt - if it does not, taxes don't make an impact because there is no tax benefit to interest paid on debt.

3:42

Pre And Post Money Valuation Explained For Entrepreneurs - Harvard Business School

Pre And Post Money Valuation Explained For Entrepreneurs - Harvard Business School

Pre and post money valuation explained for entrepreneurs,Harvard Business School. Pre-money refers to a company's value before it receives outside financing or the latest round of financing, while post-money refers to its value after it gets outside funds or its latest capital injection.To Know more about pre & post money valuation watch this video.
For more free finance lessons and 1:1 live mentorship with industry experts, visit us: https://mentor.bluebookacademy.com/live-1-1-mentoring/

4:17

How To Distribute Startup Equity (The Smart Way) | Dan Martell

Having issues deciding how to split up the equity in your business between your team (co-f...

How To Distribute Startup Equity (The Smart Way) | Dan Martell

Having issues deciding how to split up the equity in your business between your team (co-founder), advisors and potential investors? In this video, I provide some guidelines and some major DON'TS when thinking about startup equity.
Are you an entrepreneur? Get free weekly video training here:
http://www.danmartell.com/newsletter
+ Join me on FB: http://FB.com/DanMartell
+ Connect w/ me live: http://periscope.tv/danmartell
+ Tweet me: http://twitter.com/danmartell
+ Instagram awesomeness: http://instagram.com/danmartell
Related Videos
- To Raise or Not To Raise Venture Capital https://www.youtube.com/watch?v=syfMR9Akxqo
- The 3 Secret Agreements You Make When Accepting Venture https://www.youtube.com/watch?v=syfMR9Akxqo
- StartupBalance With Kids https://www.youtube.com/watch?v=X2NsSWYs-20
Okay.
Due to popular demand, I’ve decided to finally tackle the billion dollar beast.
And while it’s not easy to have a conversation about startup equity without putting the faint of heart to sleep, it’s territory that simply can’t be overlooked.
Because for any growth-oriented entrepreneur entertaining the idea of handing out equity in their company, the math absolutely matters…
And one small misstep can be the difference between accelerated growth or the speed pass to startup hell.
So if you’ve ever wondered what a healthy equity breakdown looks like for all key stakeholders (founders, advisors, investors and team members)...
… then give this new video a quick spin.
As you can see, used appropriately, equity can be an amazing way to incentivize team members and attract key advisors and investors.
Like I did with Uber’s Travis Kalanick
But if you don’t enter the conversation with clear knowledge of the right benchmarks to shoot for…
… then you’re setting yourself up to either give too much away or lose talent and investors to other startups playing a much sharper numbers game.
So get your numbers right.
Make the right offers.
And then step up to the plate and use equity for the growth accelerant it is.
To splitting the pie…
(and watching it grow),
– Dan
Don't forget to share this entrepreneurial advice with your friends, so they can learn too: https://youtu.be/hWA1b8owinc
=====================
ABOUT DAN MARTELL
=====================
“You can only keep what you give away.” That’s the mantra that’s shaped Dan Martell from a struggling 20-something business owner in the Canadian Maritimes (which is waaay out east) to a successful startup founder who’s raised more than $3 million in venture funding and exited not one... not two... but three tech businesses: Clarity.fm, Spheric and Flowtown.
You can only keep what you give away. That philosophy has led Dan to invest in 33+ early stage startups such as Udemy, Intercom, Unbounce and Foodspotting. It’s also helped him shape the future of Hootsuite as an advisor to the social media tour de force.
An activator, a tech geek, an adrenaline junkie and, yes, a romantic (ask his wife Renee), Dan has recently turned his attention to teaching startups a fundamental, little-discussed lesson that directly impacts their growth: how to scale. You’ll find not only incredible insights in every moment of every talk Dan gives - but also highly actionable takeaways that will propel your business forward. Because Dan gives freely of all that he knows. After all, you can only keep what you give away.
Get free training videos, invites to private events, and cutting edge business strategies:
http://www.danmartell.com/newsletter

1:01:30

Aswath Damodaran: "Valuation: Four Lessons to Take Away" | Talks at Google

The tools and practice of valuation is intimidating to most laymen, who assume that they d...

Aswath Damodaran: "Valuation: Four Lessons to Take Away" | Talks at Google

The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this talk, I propose to lay out four simple propositions about valuation. The first is that valuation is not an extension of accounting, insofar as it is not about recording the past but forecasting the future. The second is that valuation is not just modeling, where people put numbers into Excel spreadsheets and pump out values. A good valuation requires a narrative that binds the numbers together. The third is that valuing an asset or business is very different from pricing that asset or business, a difference that is often blurred in practice. The fourth is that luck plays a disproportionate role in whether you make money off your valuations. Put differently, you can do everything right and still walk away with nothing or worse at the end.
About the Author
I view myself, first and foremost, as a teacher. I do teach valuation and corporate finance not only to MBAs at Stern but to anyone who will listen (on iTunes U, online and on YouTube). I love to write books, teaching material and blog posts. After 30 years of teaching finance, I still find it fascinating as an interplay of economics, psychology and number crunching.

IPO Valuation Model

In this tutorial, you’ll learn what an “IPO valuation” really means, how to model an initial public offering (IPO) transaction, and what an IPO model tells you about the company and its possible valuation multiples before and after going public.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
4:17 The Rationale and Assumptions Behind an IPO
7:47 Pricing vs. Trading Equity Value in an IPO
12:38 Primary vs. Secondary Shares and the Greenshoe or Overallotment Provision
16:10 Deal Size & Net Proceeds to Issuer
19:31 Implied ValuationMultiples
21:08 Alternate IPO ModelDriven by Offering Price per Share and Shares Sold/Issued
24:05 Recap and Summary
Lesson Outline:
We get a lot of questions about "IPO valuation" or "IPO modeling," but the truth is that it’s really simple because you don't, in fact, "value" a company in an IPO.
Instead, you simply value a company and then decide how its valuation might be different in an IPO (e.g., no private company discount).
Step 1: Assumptions & Setup
You almost always start an IPO model with an idea of how much in funding the company wants to raise, and the multiples it may be valued at (based on public comps).
The multiples used vary by industry, but 1-year forward P / E multiples are very common (e.g., go to the next full fiscal year and assume a multiple for that projected full-year figure).
Here, we’d pick forward multiples from similar, profitable social networking / mobile messaging companies (not covered in this tutorial in the interest of time).
Amount of Capital to Raise: Very discretionary and it comes down to the company's plans, how many existing shareholders want to sell, whether it's PE or VC-backed, etc.
This is often set to 20-40% of a company's value; common to sell ~1/4 or ~1/3 of the company in a public offering, though that also varies.
Step 2: Trading vs. Pricing and the Pricing Discount
You apply the assumed multiple to the company's relevant metric, so ForwardNet Income in this case, which gets you the "Post-Money Equity Value @ Trading."
This is what the company's market cap should be after it has raised the capital and is trading on the stock market.
So we can then calculate the Post-Money Equity Value at Trading (the market rate) vs. Pricing (the discounted rate that institutional investors get).
And then calculate the Implied Offering Price per Share based on this - take this value, subtract the funds raised, and divide by the company's current share count.
Step 3: Determining the Primary vs. Secondary Shares and the "Greenshoe" (Overallotment) Provision
"Primary Shares" are newly created shares that represent actual capital being raised in the deal - this capital then goes to the company in the form of cash.
"Secondary Shares" represent existing investors selling their stakes to new investors (usually large institutions like Fidelity). No capital is raised here.
Formulas: Always determine the Primary Shares first, based on the Post-Money Equity Value @ Pricing and/or the amount of capital raised… and then figure out the Secondary Shares in relation to that.
Have to also figure out split between "Base Offering" and "Greenshoe" - "Greenshoe" is an option to issue even more shares if demand is strong enough. Used for cases where the company wants to keep the same offering price, but simply raise more capital if more investors are interested.
Very commonly set to ~15% in offerings in developed markets.
Step 4: Net Proceeds to Issuer
Look at Total Offering Size first (Primary + Secondary + Overallotment) and then subtract out fees.
Underwriting Discount: Banks used to, and sometimes still do, buy a portion of the company's stock as "insurance" in case the company can't sell it to anyone else… so this is supposed to compensate them for the risk of holding the stock temporarily, in case it can't find any buyers.
Bigger deal = lower fee % in most cases.
% Company Sold: Based on Primary Proceeds and Post-Money Equity Value @ Pricing - how much the company sold of itself just before it started trading publicly.
Step 5: Valuation Multiples
We move from Equity Value to Enterprise Value as we normally do… but we must factor in the cash raised in the IPO now!
Equity Value implicitly reflects this cash, so it must be subtracted when calculating the new Enterprise Value.
Would have to compare these multiples to those of the public comps to decide whether or not they look reasonable.
RESOURCES:
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.xlsx
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-09-IPO-Valuation-Model.pdf

1:01:30

Aswath Damodaran: "Valuation: Four Lessons to Take Away" | Talks at Google

The tools and practice of valuation is intimidating to most laymen, who assume that they d...

Aswath Damodaran: "Valuation: Four Lessons to Take Away" | Talks at Google

The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this talk, I propose to lay out four simple propositions about valuation. The first is that valuation is not an extension of accounting, insofar as it is not about recording the past but forecasting the future. The second is that valuation is not just modeling, where people put numbers into Excel spreadsheets and pump out values. A good valuation requires a narrative that binds the numbers together. The third is that valuing an asset or business is very different from pricing that asset or business, a difference that is often blurred in practice. The fourth is that luck plays a disproportionate role in whether you make money off your valuations. Put differently, you can do everything right and still walk away with nothing or worse at the end.
About the Author
I view myself, first and foremost, as a teacher. I do teach valuation and corporate finance not only to MBAs at Stern but to anyone who will listen (on iTunes U, online and on YouTube). I love to write books, teaching material and blog posts. After 30 years of teaching finance, I still find it fascinating as an interplay of economics, psychology and number crunching.

1:30:07

Session 20: Valuing Private Business (for sale and IPO)

In this session, we look at ways of dealing with the challenges of factoring in illiquidit...

Session 20: Valuing Private Business (for sale and IPO)

In this session, we look at ways of dealing with the challenges of factoring in illiquidity and lack of diversification in private businesses as well as valuation for an IPO.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2Modtest.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession20.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20test.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20soln.pdf

1:27:06

Session 21: IPO and VC Valuation & First Steps on Real Options

In today's class, we put the finishing touches on private company valuation by looking at ...

Session 21: IPO and VC Valuation & First Steps on Real Options

In today's class, we put the finishing touches on private company valuation by looking at key questions that arise in private company valuation (illiquidity, key person etc.) and then looked at valuing IPOs. In particular, the question of what happens to the proceeds from an offering can affect value per share, and the offering price itself is subject to the dynamics of the issuance process, with investment bankers more likely to under price than over price offerings. In the second part of the class, I did a quick introduction to real options, setting up the intuitive rationale for real options. We covered the basics of options, starting with why real options are so attractive to analysts and investors: they allow you to add a premium to your DCF value. The two building blocks for real option value are learning (from what is going on around you or ongoing events) and adapting your behavior. There are three questions that underlie the use of real options. The first is recognizing when you are dealing with an option, with a payoff diagram being the give away. The second is looking for exclusivity which is what gives options value. The third is using an option pricing model, which is built on replication and arbitrage.
Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/pvtco2test.pdf
Slides: Part 1: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession21A.pdf
Part 2: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession21B.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Atest.pdf
Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Asoln.pdf

Expense Synergies in Merger Models

In this expense synergies lesson, you'll learn why expense synergies matter, what they consist of, how they impact M&A deals.
By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
You'll also learn and accretion / dilution, and 3 common mistakes that people make when incorporating synergies into models.
Table of Contents:
3:45 Example of Expense Synergies (OfficeConsolidation)
7:57 Oversight #1: More Granular Estimates / Checks
11:37 Oversight #2: It Takes Time to Realize Synergies
14:39 Oversight #3: It TakesMoney to Realize Synergies
17:39 How DoesAll of ThisImpact the Deal, Accretion / (Dilution), and So On?
18:34 Recap and Summary
Why do Synergies matter? And what are they exactly?
Put simply, they're cases where 1 + 1 = 3 in mergers and acquisitions.
You combine 2 companies, and get MORE revenue than just the Buyer's revenue plus the Seller's revenue…or you get LESS in expenses than just the Buyer's expenses plus the Seller's expenses.
Revenue Synergies are tough to estimate and are very error-prone… but sometimes they matter and can be
calculated more precisely.
Expense Synergies are more grounded in reality, because you look at what both companies are spending and decide
what can be cut - at the very least, it's based on actual expenses incurred by both companies.
Synergies matter because some deals require synergies to look good on paper (i.e., be accretive).
And some deals are motivated primarily by synergies, such as this one with 2 very similar men's retailers merging.
BUT… a lot of people get it wrong in 3 main areas when it comes to expense synergies in merger models:
Oversight #1: More Granular Estimates / Checks
Lots of models - even very complex ones - will just say something like, "$100 million in synergies per year!"
This is NOT ideal.
It's better to break out the synergies by specific functional areas, if not by specific employee counts, building rents, anticipated discounts on inventory purchases, and so on.
In real life, as a banker, you don't really know enough to do this - need the input of both companies' CFOs and finance departments to make estimates.
Oversight #2: It Takes Time to Realize Synergies
No matter how evil the combined company is, it can't just take the "Death Star" approach and blow up entire divisions / buildings all at once… it takes time to realize synergies, even if you're simply laying off employees.
And something like consolidating buildings or inventory purchases / processes takes even more time.
Here: The company makes it easy in their investor presentation, since they give us the expected amounts that will be realized each year.
Oversight #3: It Takes Money to Realize Synergies
It's not just "free" to consolidate buildings or factories or shuffle people around… there are costs associated with all of that.
Often labeled "Restructuring Costs" or "Integration Costs" or similar names.
Could show up on the Income Statement or on the Cash Flow Statement or both… depends on the deal and
the type of expenses.
Here: The company makes it easy for us with its estimate of $100 million in Integration Costs "over the next 18 months" - so we allocate that over the first 2 years of the model.
How Does All of This Impact the Deal, Accretion / (Dilution), and So On?
If you factor in the time and money required, it always makes the deal less accretive or more dilutive… because it pushes the Combined Pre-Tax Income lower in earlier years due to:
a) Some percentage less than 100% of synergies will be there; and
b) CFS expenses will push down the company's debt repayment ability, thereby increasing interest expense from debt in the earlier years.
Extra Resources
http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-05-Mens-Wearhouse-Jos-A-Bank-Deal-Investor-Presentation.pdf

1:30:06

Session 14: More on the Dark Side (Emerging Market, Financial Service and Transition Companies)

In this session, we started with companies going through transitions before moving on to e...

Session 14: More on the Dark Side (Emerging Market, Financial Service and Transition Companies)

In this session, we started with companies going through transitions before moving on to emerging market companies and financial service companies.
n this session, I first look at valuing entire markets and then at the process for valuing young companies.
Start of the class test:http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/dcfvaltests3.pdf
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr15/valsession14.pdf
Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/session14Atest.pdf
Post class test solution:
http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/session14Asoln.pdf

20:49

Interview with the NAGA Financial Director (NAGA Upcoming ICO)

Interviewing Wladimir Huber, Financial Director of NAGA , that is ongoing ICO.
We are look...

Interview with the NAGA Financial Director (NAGA Upcoming ICO)

Interviewing Wladimir Huber, Financial Director of NAGA , that is ongoing ICO.
We are looking to get as much information as possible about the NAGA ICO
About Naga: THE ONLY TOKEN SALE BY AN IPO’D FINTECH, UNITING THE FINANCIAL, CRYPTO, AND GAMING MARKETS.
Pre-Sale Sold: 18,500,000$
Tokens Available for sale: 220,000,000$
Advisors: Roger Ver; Mate Tokay; Miko Matsumura
For more info please, visit:
Web: https://goo.gl/mmBoZR
Questions would be asked from the community Chat as well
Please comment down, which ICO would you guys be interested in to cover in the future
Buy Trezor: https://shop.trezor.io?a=96c323ecc93c https://bitcoingold.org/downloads/
Thanks for watching.
Follow and Join us at:
Telegram: https://t.me/CCNChat
Facebook : https://www.facebook.com/CryptoCurrencyNetwork1/
Twitter: https://twitter.com/NetworkCurrency
Instagram : https://www.instagram.com/cryptocurrencynetworkccn/
Web: https://bfgroup.io/
info@bfgroup.io

Ep 156: Stock Trading Webinar Q+A (Oct 2017)

Posted at: http://tradersfly.com/2017/10/ep-156-webinar-qa/
★ SUMMARY ★
In today’s live webinar class, I’m going to answer some of your questions in as much detail as possible, honestly and coming from all my trading experience and what I’ve done over the years.
Some of the questions we’ll answer are:
How easy or difficult is it to earn $1000 dollars trading stocks as a newbie with $2000 to invest?
This, of course, depends on your own personal strategies and risk levels, but generally speaking, it is really hard to make that amount of money with only $2000 investment, because it would mean a 50% return on your investment, which is huge and not something that most people are able to do.
What do you think about the Robin hood trading platform?
This is a very popular cell phone trading platform, because it allows you to trade stocks for free, without broker fees. However, there are some issues when it comes to this trading platform. First, I don’t like trading on a cellphone, another issues is that it doesn’t allows you to short any stocks, you can’t hedge either, and generally their fill rates are not the best, because they need to make money some way, so they pump up the fill rates, in order to make money on their back end.
What is back testing?
Back testing is looking at the history of the market, and seeing how a specific strategy would have worked at a specific point in the past, when it comes to your results, and that way find out if that strategy would have worked or wouldn’t have worked.
In this video, we are also going to look at overall market conditions. We’ll analyze some stocks, evaluate them and see how they’re doing, do some technical analysis on them, and we’ll look for patterns and trend lines in the charts.
★ REGISTER FOR A FREELIVECLASS ★
http://bit.ly/marketevents
★ GETTING STARTED RESOURCE FOR TRADERS ★
http://bit.ly/startstocksnow
* Please note: some of the items listed below could and may be affiliate links **
* Trading Software / Tools *
Scottrade: http://bit.ly/getscott
SureTrader http://bit.ly/getsuretrader
TC2000: http://bit.ly/gettc2000
TradeKing: http://bit.ly/gettradeking
TradeStation: http://bit.ly/getstation
★ SHARE THIS VIDEO ★
https://youtu.be/1252i29OSG8
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us!
FREE 15 DAY TRIAL TO THE CRITICAL CHARTS
- http://bit.ly/charts15
GET THE NEWSLETTER
- http://bit.ly/stocknewsletter
STOCK TRADING COURSES:
- http://tradersfly.com/courses/
STOCK TRADING BOOKS:
- http://tradersfly.com/books/
WEBSITES:
- http://rise2learn.com
- http://criticalcharts.com
- http://tradersfly.com
- http://backstageincome.com
- http://sashaevdakov.com
SOCIAL MEDIA:
- http://twitter.com/criticalcharts/
- http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
- TradersFly: http://bit.ly/tradersfly
- BackstageIncome: http://bit.ly/backstageincome

56:41

Equity Crowdfunding Is It a Good Funding Option for Your Startup

There's a lot of buzz about crowdfunding these days, but is seeking money from the crowd t...

Equity Crowdfunding Is It a Good Funding Option for Your Startup

There's a lot of buzz about crowdfunding these days, but is seeking money from the crowd the right path for your company? Do you know how it really works? And how can you increase your odds of building a successful campaign?
Before you give up a percentage of ownership in your company through equity crowdfunding, check out this presentation from Ventureneer (www.ventureneer.com) presented by EarlyGrowthFinancial Services (www.earlygrowthfinancialservices.com) for an in-depth look at:
- Crowdfinancing misconceptions
- What you need to know about Reg A+
- Reward-based crowdfunding vs equity crowdfunding
- How to run a successful equity crowdfunding campaign
- Preparing your company for crowdfunding
- Finding the best crowdfunding platform for your company
- And more...!

Ep 91: Evaluating Macroeconomic Conditions - Bulls vs Bears
★ SUMMARY ★
In this episode I’d like to go into evaluating market macroeconomics as well as looking at bulls vs. bears.
If you look at the market overall and we go into the weekly stand point, you can see that we’ve made all-time highs at this price level, so the SPY all-time highs here is right around the 2113 level, give or take.
If you look at the SPX, you’re looking right around the 2140 level, really it’s the all-time highs here is 2132 and then if we go into this bar here, 2134, so call it 2135.
What happens in these scenarios is, when you have a combination of shorts and longs, you’re able to take your positions off the table, and take your profits and allow the others to catch up. And then you get out of those shorts, you take some profits and you flip and go into the long side.
Posted at: http://tradersfly.com/2016/06/ep-91-evaluating-macroeconomic-conditions-bulls-vs-bears/
★ SHARE THIS VIDEO ★
https://youtu.be/6kUCy1y_E7w
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us!
FREE 15 DAY TRIAL TO THE CRITICAL CHARTS
-- http://bit.ly/charts15
GET THE NEWSLETTER
-- http://bit.ly/stocknewsletter
STOCK TRADING COURSES:
-- http://tradersfly.com/courses/
STOCK TRADING BOOKS:
-- http://tradersfly.com/books/
WEBSITES:
-- http://rise2learn.com
-- http://criticalcharts.com
-- http://investinghelpdesk.com
-- http://tradersfly.com
-- http://backstageincome.com
-- http://sashaevdakov.com
SOCIAL MEDIA:
-- http://twitter.com/criticalcharts/
-- http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
-- TradersFly: http://bit.ly/tradersfly
-- BackstageIncome: http://bit.ly/backstageincomeome

3 Lessons I Learned Making $60k in 1 Month : Behind The Trades Ep. 04

ReadPost Here: https://www.warriortrading.com/3-lessons-making-60k-1-month-behind-trades-ep-4/
FREE eBook: "How to Day Trade" | Download Now: http://webinar.warriortrading.com/signup
DISCLAIMER: http://www.warriortrading.com/disclaimer/
//
Join our FreeDay TradingChat Room here: https://www.warriortrading.com/free-day-trading-chat-room/
See our LiveStreamingChannel on TickerTV here: https://ticker.tv/daytradewarrior/
I teach Day Trading Strategies for BeginnerTraders. I focus on Momentum Trading Strategies including Gap and GO! and Trend Finding Strategies. All of our classes are available for immediate streaming at https://www.WarriorTrading.com.
// Helpful Links
Day Trading Chat Room: https://www.warriortrading.com/day-trading-chat-room/
Premium Trading Courses: https://www.warriortrading.com/trading-courses/
Gap and Go Trading Strategy: https://www.warriortrading.com/gap-go/
Momentum Trading Strategy: https://www.warriortrading.com/momentum-day-trading-strategy/
Reversal Trading Strategy: https://www.warriortrading.com/reversal-trading-strategy/
ContactInfo: https://www.warriortrading.com/contact/
Twitter: @Daytrade Warrior @swingwarrior
“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime”…
// Learn How to Day Trade and Learn How to Swing Trading
As Day Traders and Swing Traders our mission is simple. We are looking for stocks that we expect will move in a predictable direction. We want to take a position with a predefined stop level and profit target. Sounds easy right? In a lot of ways it is. But there are literally thousands of different strategies for trading the market. Every trader has a unique approach to trading. Our goal is to teach you our strategies. I have developed a series of profitable trading strategies for beginners. Our Trading Courses focus on the most fundamental aspects of a successful trade.
// ChartPatterns
After you understand risk management and proper stock selection, we teach you how to find stock patterns on charts. These patterns are how we base our risk and reward. We look for chart patterns that have well defined areas of support and resistance. We will use previous support levels as our stop price, or our risk, and we look at previous resistance areas as our initial profit target, or our reward. If the profit vs loss ratio is 2:1 we will take the trade. I teach both day trading strategies and swing trading strategies. For day trading we focus primarily on 5min charts while swing traders focus more on daily charts. The patterns in general are the same. I teach traders how to find patterns in real-time including BullFlags, Bear Flags, FlatTops, Flat Bottoms, and Rubber Band Reversal Setups.
// Trading Strategies
Learning risk management, proper stock selection, and chart patterns is important, but those alone don’t create a trading strategy. A trading strategy requires details on the time of day you take these trades, what type of stocks you like to trade, what percentage to success you expect. All our students are required to papertrade and prove to me that they can trade on a percentage of success that is high enough to justify real trading. If you can’t make money in a demo account, you have no business trading a real account. We have saved students hundreds of thousands of dollars by encouraging paper trading while they are learning. The market will be here for a long time to come. The important thing for you right now is to build up the skills to trade the market successfully. You will learn that once you possess the skills to consistently make $20.00/day all it takes to make $200 is larger share size. Then all it takes to make $2000 is again, larger share size. The hardest part is being consistently green just $20/day. So that is our initial target for all of our students. Profitable trading 4/5 days per week for at least 3 months.
Join our Free Day Trading Chat Room here: https://www.warriortrading.com/free-day-trading-chat-room/

Original Upload:
https://www.youtube.com/watch?v=2HwFOo5rbZA&t=2s
"Peter Joseph is the founder of the Zeitgeist Movement, a grassroots, worldwide organization that advocates an alternative economic system based on sustainability, cooperation and human need. His most recent book, ‘The NewHuman RightsMovement,’ delivers a startling exposé about the violent oppression that defines our economic order, while issuing an urgent call for global activism to unite to replace it. Abby Martin sits down with Joseph to talk about the contradictions and crises of capitalism and what he advocates to save the future of the planet from catastrophe."
*
About TZM:
The Zeitgeist Movement is a global sustainability activist group working to bring the world together for the common goal of species sustainability before it is too late. Divisive notions such as nations, governments, races, political parties, religions, creeds or class are non-operational distinctions in the view of The Movement. Rather, we recognize the world as one system and the human species as a singular unit, sharing a common habitat.
------------------------------------------------------------------------------------------------
LIKE The Zeitgeist Movement @ https://www.facebook.com/tzmglobal
FOLLOW The Zeitgeist Movement @ https://twitter.com/tzmglobal
JOIN THE MAILING LIST: http://www.thezeitgeistmovement.com/
SUBSCRIBE TO THIS CHANNEL: https://www.youtube.com/channel/UCEwoFdqY09VwZFESGZ8Qp4A?sub_confirmation=1

IPO Valuation Model...

Aswath Damodaran: "Valuation: Four Lessons to Take...

Session 20: Valuing Private Business (for sale and...

Session 21: IPO and VC Valuation & First Steps on ...

Expense Synergies in Merger Models...

Session 14: More on the Dark Side (Emerging Market...

Interview with the NAGA Financial Director (NAGA U...

Ep 156: Stock Trading Webinar Q+A (Oct 2017)...

Equity Crowdfunding Is It a Good Funding Option f...

Ep 91: Evaluating Macroeconomic Conditions - Bulls...

How to Find Good Stocks...

3 Lessons I Learned Making $60k in 1 Month : Behin...

Disrupting Investments and IPO...

Peter Joseph interview w/ Abby Martin | Empire Fil...

It turns out that a theory explaining how we might detect parallel universes and prediction for the end of the world was proposed and completed by physicist Stephen Hawking shortly before he died ... &nbsp;. According to reports, the work predicts that the universe would eventually end when stars run out of energy ... ....

Article by WN.Com Correspondent Dallas DarlingIt wasn’t very long ago Republicans were accusing Democrats of either paying a few dollars to the homeless for votes or giving them a pack of cigarettes. But with Donald Trump, it’s obvious he paid $130,000 to an adult-film star in exchange for her silence last October and just before the general election ... Was the payment from his own account – or from a lawyer – or from campaign donations....

Trump's major agenda push this week will highlight his plan to tackle the opioid crisis ... But, far from being put off by the turmoil rocking his administration, Trump appears to be relishing a new chapter of his presidency, as he axes and undermines aides he distrusts and gives his impulsive personality free rein. Read More ...CNNMoney. Facebook investigating employee's links to CambridgeAnalytica ... WITCH HUNT!— Donald J ... JUST WATCHED....

Using e-cigarettes may lead to an accumulation of fat in the liver, a study of mice exposed to the devices suggests. “The popularity of electronic cigarettes has been rapidly increasing in part because of advertisements that they are safer than conventional cigarettes ... Friedman of Charles R. Drew University of Medicine and Science in Los Angeles, California ... Circadian rhythm dysfunction is known to accelerate liver disease....

Sony launched the Xperia XZ2 and Xperia XZ2 Compact smartphones during Mobile World Congress last month. Both devices are an upgrade over the Xperia XZ1 and Xperia XZ1 Compact. The company, which has opened up pre-orders of the devices, is giving away goodies such as the PlayStation gaming console, PlayStation VR pack, wireless headphones, wireless speakers and more, as a part of their order promotions ... ....

Black Panther ‘s box office records may not hold for long as Avengers. Infinity War has already claimed a record the Wakandan flick nabbed back in January. It has been reported that Infinity War has surpassed Black Panther ‘s pre-sale ticket sales in just six hours. According to Variety , movie ticket website Fandango reported Black Panther was dethroned as the superhero movie with the highest pre-sale tickets record ... ....

Pre-Owned medical devices are defined as the devices that were owned earlier by any healthcare institution and that are now subject to sale or repurchase after refurbishment ... this definition of pre-owned medical devices ... Globally, the pre-owned X-ray and Mammography machines market, from 2013, is estimated to grow at a CAGR of over 6% till 2019....

Race and pre-pregnancy body mass index (BMI) both affect leptin and adiponectin levels, and leptin levels in mid-pregnancy may be an important predictor of weight gain during pregnancy, new research suggests. <!-- more --> ... ....

The Horizonpre-ICO powered by Horizon Telecommunications has been announced to start on March 19. The project has been attracting a lot of attention as the first telecom based company raising funds through an ICO. The company through this initiative woul ... ....

Rangasthalam's pre-release event was held in Vizag on Sunday(Mar 18, 2018) and the star-studded event was inundated with Mega fans and celebrities of the industry. There were quite a few highlights in the entire event and fans of Mega family are ... ....